Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

PRIVATE BUSINESS

GLENSANDA HARBOUR ORDER CONFIRMATION

Mr. Secretary Younger presented a Bill to confirm a Provisional Order under section 7 of the Private Legislation Procedure (Scotland) Act 1936, relating to Glensanda Harbour: And the same was read the First time; and ordered to be considered upon Tuesday 7 May and to be printed. [Bill 134.]

Oral Answers to Questions — TRADE AND INDUSTRY

Government Regulations

Mr. Amess: asked the Secretary of State for Trade and Industry how many representations have been received by the Scrutiny Committee on the burden of Government regulations; and if he will make a statement.

The Parliamentary Under-Secretary of State for Trade and Industry (Mr. David Trippier): Field work for the "Burdens on Business" report involved more than 280 small firms and 14 business organisations. It has been published to stimulate further comment from all concerned.

Mr. Amess: Does my hon. Friend agree that European Community requirements are playing a significant role in increasing the burdens on business? What does he intend to do about that?

Mr. Trippier: My hon. Friend is absolutely right. European Community requirements are a substantial and growing element in the regulatory burden. That is why my right hon. Friend the Prime Minister raised the matter at the last meeting of the Council of Ministers in late March. The Heads of State of all other member countries agreed with her, and I understand that the Commission has been asked to report back on necessary action.

Mr. Ashdown: What representations has the hon. Gentleman received about the burden of local government regulations on industry? Does he agree that over-zealous planning officers often place considerable burdens on businesses, especially small start-ups?

Mr. Trippier: That certainly features in the report. Planning was a major concern in relation to small firms. That matter has been brought to the attention of my right hon. Friend the Secretary of State for the Environment, and we hope that action will ensue.

Mr. Grylls: I congratulate my right hon. and hon. Friends on identifying these burdens and on the publication of the report. Does my hon. Friend agree that the quicker these obstacles to expansion are removed, the better? Will the Government consider whether the best way to achieve that is through the introduction of a deregulation Bill to scoop up and remove all those obstacles in one parliamentary measure?

Mr. Trippier: As my hon. Friend will recall, in the debate on small firms on 18 January I said that some form of co-ordinated mechanism might be introduced to carry these initiatives forward. I chose my words carefully, because the decision as to the form of any such coordinating mechanism will have to be taken by people very much senior to me.

Mr. Eastham: Does the hon. Gentleman agree that many local authorities have been extremely co-operative in relation to small businesses and that ratepayers have made considerable contributions, often carrying out duties which should be the responsibility of central Government?

Mr. Trippier: I do not necessarily agree with that, although I agree that in many cases local authorities have tried very hard to assist small firms. We are concerned about the response of councils to the exhortations of the Department of the Environment—for example, in circular 22/80, which was supposed to give the benefit of the doubt to businesses seeking planning permission. A further circular 16/84 was issued by the Department of the Environment more recently and was widely welcomed at the Department of Trade and Industry. We await with great interest the response of the local authorities.

Passenger Cars

Mr. Hoyle: asked the Secretary of State for Trade and Industry what proportion of the United Kingdom market for passenger cars is now taken by imports; and how this figure compares with that for 1978.

The Parliamentary Under-Secretary of State for Trade and industry (Mr. John Butcher): In the first quarter of 1985, 57·9 per cent. of the United Kingdom passenger car market was taken by imports. In 1978 the figure was 49·3 per cent.

Mr. Hoyle: Does the Minister agree that those figures prove that the Government are not defending the interests of the British motor components industry, given that in the 1970s it employed 1 million people but that figure has now dropped to 400,000? Will the Secretary of State now get on his cycle and defend the interests of people working in the motor industry by ensuring that multinational companies manufacturing in this country do not import complete vehicles from abroad? Will he also inform the Japanese that local content means United Kingdom, not European, content? Is he aware that the British motor industry will otherwise be decimated? What do the Government intend to do about that?

Mr. Butcher: The hon. Gentleman has chosen the dates of his survey with conspicuous cunning. He is aware that between 1974 and 1979 imports of motor vehicles doubled from 28 per cent. to 56 per cent. It is this Government's duty to ensure that the more malignant trends of that period are put into reverse and that our motor industry becomes more competitive.
Of course we are anxious to see the maximum British content in British-built cars. That is why we stipulated certain measures in the Nissan deal and why we are anxious to support the flagship British motor industry builder, British Leyland, to the tune of £1·43 billion during the lifetime of this Administration.

Mr. Stanbrook: To what factors does my hon. Friend ascribe the reluctance of the British public to buy British cars? Will those factors be taken into account when Austin Rover next wishes the taxpayer to subsidise it?

Mr. Butcher: My hon. Friend should note that very good strides have been made by British vehicle builders. It is unfortunate that a large number of people in the United Kingdom have acquired the habit of buying foreign cars. They are not looking, as they should, at the better model range and increased quality now coming forward from British vehicle builders. I hope that they will reacquire the habit of at least looking again at British products.

Mr. Terry Davis: In view of that answer, will the Minister take this opportunity to confirm that the Government, by refusing to allow British Leyland to put a new engine into production, are forcing it to buy Japanese engines, with a consequent loss of 5,000 jobs, mainly at the Longbridge factory in Birmingham?

Mr. Butcher: As a Member for a distinguished constituency employing many car workers, the hon. Gentleman has a responsibility not to spread alarm and despondency by such questions. The matter that he has raised will be considered, among other matters, in the time-honoured tradition as part of the corporate plan. At the moment, I can say that the hon. Gentleman's question is pure conjecture.

Mr. Beaumont-Dark: I thank my hon. Friend for confirming that the Government are not yet prejudiced against the future of Austin Rover. Will he confirm that it would be in the best interests of the British motor industry if we had a British engine? Will he further confirm that if it was good enough for the mines to lose money, the modest extra sum of a comfort letter would help the British motor industry and save more than 5,000 jobs?

Mr. Butcher: The whole question of future product development must be considered in the context of our discussions on the corporate plan. Of course, we appreciate BL's wish to see a design capability retained in the United Kingdom. Part of its submission is to be able to exercise that choice.

Mr. John Smith: Will the Minister confirm what is known throughout the country—that the corporate plan includes a proposal to build a replacement for the A-series engine, costed at £250 million? Have not the Government refused to endorse BL's request? Is not the Department of Trade and Industry at war with Austin Rover over that project? Will the Minister end the uncertainty caused by the Government's reluctance to support the only remaining independent British vehicle manufacturer and stand by British industry, rather than force it into the hands of the Japanese?

Mr. Butcher: Relations between BL and the Department of Trade and Industry are in their usual excellent shape. There is no confrontation or warfare. There is no formal bid for additional funding in the

corporate plan. The question of BL's future product development strategy is one of the major matters to be considered as part of the discussions on the corporate plan. As previous Administrations have done, we shall place our conclusions before the House at the appropriate time.

Mr. Powley: Does my hon. Friend agree that one of the ways to improve British car market penetration, and so reduce import penetration, would be for hon. Members—when both inside and outside the House—to condemn practices such as industrial disputes, go-slows, demarcation disputes and excessive wage demands? Would not that improve the quality, productivity and delivery of British cars on to the British market?

Mr. Butcher: My hon. Friend is right in identifying some of the past causes—[Interruption.]—of the British motor industry's difficulties. I am bound to say to him, if Labour Members will allow me to finish my sentence, that many of the malignant trends are being put into reverse and that British consumers should look yet again at the British product. In concentrating on BL, hon. Members may have missed an important target. There has been a significant increase in productivity and improvement in working practices within Vauxhall Motors and Ford. Vauxhall Motors is selling only 50 per cent. of its total production in the United Kingdom from the British-built source. It has only a 50 per cent., or less, British content in the cars which it manufactures. We are concerned that Vauxhall Motors and Ford should start cranking up their British content. British sales and British build.

General Agreement on Tariffs and Trade

Mr. Malone: asked the Secretary of State for Trade and Industry what progress is being made towards a new general agreement on tariffs and trade round of international talks on trade.

Mr. Gould: asked the Secretary of State for Trade and Industry what progress is being made in preparing for talks aimed at a new round of tariff reductions.

The Minister for Trade (Mr. Paul Channon): We are making good progress towards a new round of multilateral trade negotiations, although we do not yet have the agreement of all the GATT members. I hope that the Bonn economic summit will provide further impetus towards the launch of a new GATT round in 1986.

Mr. Malone:: Does my right hon. Friend agree that freer trade will mean more trade and that more trade will mean more jobs in Britain? Will he give the House an assurance that the Government are doing what they can to ensure that all the GATT members enter into a new round of talks so that freer trade can be established as quickly as possible?

Mr. Channon: Yes, I can give my hon. Friend that assurance. I agree with what he has said. Since the second world war, world trade has increased eightfold, while world production has increased only fourfold. My hon. Friend has made an important point.

Mr. James Lamond: Does the Minister agree that free trade means free trade in both directions, and that that is an essential part of any agreement?

Mr. Channon: Yes, Sir. In any round of negotiations our aim will be to try to persuade other countries to remove any barriers that may exist against our exports.

Mr. Nicholas Winterton: Does my right hon. Friend accept that free trade will lead to more jobs only if the advice of the hon. Member for Oldham, Central and Royton (Mr. Lamond) is carried through? Britain has been a freewheeling area for most manufacturing countries, especially within the developing world, and even within the EC.
We have suffered because jobs have gone. Free trade in Britain has led to fewer rather than more jobs.

Mr. Channon: I cannot agree with my hon. Friend about that. We probably export more of our GDP than any other developed country—[Interruption.] It is interesting that such comments should be made today of all days when we know how confident British industry is about its export effort. My hon. Friend the Member for Macclesfield (Mr. Winterton) will know that we probably export more of our GDP than any other developed country. It is essential that we have overseas markets for our goods. That means that we must in general be in favour of free trade; that is, free but fair trade.

Sir Hector Monro: First, I appreciate the letter that I have received from my right hon. Friend. When he engages in international talks, will he be absolutely certain that they lead to a new multi-fibre arrangement that is acceptable to the British textile industry, whose future will depend on it entirely?

Mr. Channon: My hon. Friend will know that the Government have not yet come to a conclusion on the multi-fibre arrangement. I hope that we shall be able to discuss the matter in the near future.

Mr. Sheerman: Is the Minister aware that the answer that he gave to his hon. Friend the Member for Dumfries (Sir H. Monro) will create despondency in the textile industry? Whenever we hear his responses to questions on the textile industry, it seems that he is planning to open up totally free trade for the British textile industry. If he does that, he will have a war on his hands in the House.

Mr. Channon: I do not think that my answers need cause any dismay to the textile industry. It has heard and read reports of our exchanges on many occasions. It has made many representations to me, and I have engaged in many consultations. I am aware of the industry's view. I hope that the Government will soon have an opportunity to make their views clear to the House, and I am sure that we shall be able to convince it that they are right.

Mr. Dorrell: Does my right hon. Friend accept that moves towards a new round of GATT talks are extremely welcome? Does he also accept that a most important restriction on the growth of international trade is exaggerated and speculative movements in foreign exchange rates? Therefore, does he accept that he has a major departmental interest in the Government in following any avenues that may lead to a reduction in such movements?

Mr. Channon: My hon. Friend raises an extremely important point, but he will appreciate that it is primarily the responsibility of my right hon. Friend the Chancellor of the Exchequer, who has held talks about this and related matters in the OECD and in Washington.

Mr. Ashdown: Is it not true that the MFA was set up as a temporary measure behind which we could restructure our industry? Does not the Silberston report show that the

damage caused to the British textile industry by at least liberalising the MFA would not be as great as is often claimed? Therefore, is there not a case, in terms of moral obligation and practical wisdom, to consider some liberalisation of the MFA?

Mr. Channon: I note what the hon. Gentleman says, and all those points will be borne in mind before decisions are taken. That is the view of the Liberal party on this issue.

Mr. Ward: When my right hon. Friend begins the new round of GATT, will he bear in mind the problems of Third world countries, which need to export to the European Community, and will he consider cautiously further attempts by the Community to erect trade barriers against products on which Third world countries depend for their existence?

Mr. Channon: I agree with my hon. Friend. In the European Community, Britain is trying desperately to retain a free trading element to give access to developing countries. Since we export to them, they must be given an opportunity to export to other countries. Otherwise, they will not be able to pay for the goods that they buy from us. It will be in our interests to do so.

Mr. Gould: Since our deficit in manufactured goods this year is already breaking all records, is it as self-evident as the Minister seems to believe that his free trade theology is best suited to our trading needs? Before he rushes headlong into a further round of tariff cutting, which can only increase our vulnerability to imports, will he ensure that we at least have a proper debate in the House and the country as to where the balance of advantage lies?

Mr. Channon: There is no question of headlong rushing, because trade talks are bound to take years. Nor are tariffs the major point. It is extraordinary that the hon. Gentleman should persist with such allegations on a day when we see that business confidence has increased, exports are increasing, the figures for manufactured exports are better than ever, there is more optimism. and export orders are at record levels.

Japan

Mr. Baldry: asked the Secretary of State for Trade and Industry if he will make a statement on his recent visit to Japan.

The Secretary of State for Trade and Industry (Mr. Norman Tebbit): During my recent visit to Japan I had useful exchanges with senior Japanese Ministers, including the Prime Minister, about a range of multilateral and bilateral trade issues. I also met several leading industrialists with whom I discussed the prospects for further industrial co-operation and two-way investment.

Mr. Baldry: I thank my right hon. Friend for that reply. Penetrating the Japanese markets requires not only commercial competitiveness but cultural understanding. To which bodies can smaller businesses especially look for guidance and advice as to how they can best penetrate Japanese markets?

Mr. Tebbit: The first point of contact for a company considering exporting to Japan and which needs advice is the Export to Japan unit of the British Overseas Trade Board, which can itself help and can direct companies to other places where help can be obtained.

Mr. Hoyle: When will the Secretary of State do something about the huge deficit between our imports of Japanese goods and our exports to Japan? He claims to be tough—the hammer of the unions. Will he show his toughness by standing up for British interests, especially with the Japanese?

Mr. Tebbit: That is a nice piece of gunboat diplomacy from the hon. Gentleman, but he should understand that things are not quite the way they were in the middle of the 19th century. There is little doubt in my mind that some members of the Japanese Government, including the Prime Minister, are as aware as the hon. Gentleman of the threat that will arise to the world free trading system unless Japan's trading surplus is abated. There will be many problems in organising a sensible abatement of that surplus. I do not entirely share the hon. Gentleman's gunboat diplomacy view, especially as gunboats are in short supply.

Mr. Bowen Wells: Well known as my right hon. Friend is as one of our principal gunboats in our trade disputes and relations with Japan, could he tell me what representations he has made to the Japanese Government on their predatory and disgraceful dumping prices in relation to the building of the Bosporus bridge? What did his counterpart in Japan say that they would do about this focused assault on our legitimate trading interests?

Mr. Tebbit: When I was in Japan, I was not aware of the scale of the subsidy that was being offered by the Japanese contractors and their partners in seeking to gain that contract. With regard to the bridge contract, the British company's bid and the scale of aid that was offered by the British Government were highly competitive with the Japanese company's bid and aid in that sector. However, the same was not true of either the pricing or the scale of aid offered on the associated roadworks; in particular, our partners in foreign companies were not able to come forward with an aid package the size of that of the Japanese. Having said all that, it seems to me that the Japanese tactics of subsidy in this case were scarcely compatible with their avowed aim of reducing their trade surplus. No doubt that will be brought to their attention.

Mr. Heffer: Accepting that capitalism is a system of international competition and that the Government are dedicated to the capitalist concept, is it not true that for the British people the interests of British capitalism also have some interest? When will this capitalist Government, dedicated to the continuation of the capitalist system, do something about defending British capitalism against Japanese capitalism?

Mr. Tebbit: I think that the hon. Gentleman, uncharacteristically, may be in a state of some political confusion. I think that he is mixing up 20th century capitalism with 17th century mercantilism. I do not think that subsidies should form a large part of capitalism either in the United Kingdom or elsewhere.

Mr. Fallon: Reverting to predatory pricing by the Japanese, may I ask whether my right hon. Friend is aware that there are 900 bridge builders in my constituency who would very much welcome some firmer international rules on the extent to which Governments can subsidise companies in important overseas contracts of this sort?

Mr. Tebbit: I would welcome not only firmer rules, but perhaps a greater willingness to abide by the rules;

although again I have to say that in this case it does not appear that the Japanese Government broke such rules as there are.

Mr. Park: If the Japanese people take no notice of the urgings of their Prime Minister to buy more goods from outside Japan, what steps will the Secretary of State contemplate?

Mr. Tebbit: Several steps could be taken, some of which I urged upon the Japanese Government. The Japanese Government could give a good example to the Japanese people by making major capital purchases from overseas. That is one thing that could be done. They could also help by introducing measures to internationalise the yen so that it more accurately reflected the strength of the Japanese manufacturing economy. Taking steps along those lines could ease that problem.

Mr. Hickmet: Does my right hon. Friend accept that the predatory pricing policies of Japan and the dumping of credit are an absolute disgrace, and that the consequence is that the Japanese are simply hijacking our industry? The bridge builders in the constituency of my hon. Friend the Member for Darlington (Mr. Fallon) will be eliminated as a result. Furthermore, many other British industries have had their bases destroyed by such policies. What is my right hon. Friend going to do about it?

Mr. Tebbit: I can well understand the anger felt by my hon. Friends, because clearly the British company's bid was competitive and better than that made by the Japanese company. British Government aid to that company was on the same level as Japanese aid, but unfortunately the countries associated with us were not as smart as the Japanese company's associates.
I agree that the Japanese Government, in offering cheap credit and subsidy to that extent, were foolish. It was probably unnecessary under the circumstances for the Japanese Government to go that far to get the order. The Japanese Government's action was incompatible with the programme they have announced to reduce their trade surplus. That will be brought clearly to their attention again. As I said in Japan, unless that surplus is abated, unless their markets are opened and unless the Japanese desist from some of their trading practices, protectionist forces will be impossible to resist.

Mr. John Smith: Is the Secretary of State aware that, although I have no doubt that he raised these issues with the Japanese in Tokyo, there is a great difference between Japanese professions and Japanese actions? Precisely what undertakings, if any, did the right hon. Gentleman receive from the Japanese about a change in their policies? If no undertaking was given, what action will the right hon. Gentleman take to ensure that such undertakings are given?

Mr. Nicholas Winterton: None.

Mr. Tebbit: When my hon. Friend the Member for Macclesfield (Mr. Winterton) is invited to speak from this Box I hope that he will put his case, but perhaps he will allow me to answer the question.
The undertaking that I received was that the Japanese Government would pursue with vigour the policies which Mr. Nakasone announced on 9 April—that is, opening and liberalising the Japanese market. An undertaking was


given to seek further to reduce the non-tariff barriers where we could show that effective non-tariff barriers were being imposed by the Japanese Government.
Although no guarantees were given, a great deal of discussion took place about the liberalisation of the Japanese financial markets. I believe that that liberalisation will occur, although much too slowly for my liking. I have no doubt that the Japanese are keeping some of their powder dry, like most other countries, for future rounds of trade negotiations.

Manufacturing Industry

Mr. Knox: asked the Secretary of State for Trade and Industry what is the most recent figure for output in manufacturing industry; and how this compares with the figure for the same month five years ago.

The Minister of State, Department of Trade and Industry (Mr. Norman Lamont): For February 1985 the index of production for manufacturing is 102, based on 1980 being the equivalent of 100. This is 4 per cent. lower than its value in February 1980, though 10 per cent. higher than its value during the trough in the first quarter of 1981.

Mr. Knox: Does my hon. Friend not find it alarming that output has fallen by that amount in the past five years? To what extent does he think that Government economic policies have been responsible for the fall?

Mr. Lamont: My hon. Friend will know that manufacturing in the previous peak in 1979 was below that of the earlier peak in 1973. The trend is long term. I should have thought that my hon. Friend might have felt it worth while to refer to the significant CBI industrial trends survey published today. It is one of the most optimistic ever published. Manufacturing export orders are shown to be the best since 1977. The outlook for employment in manufacturing is also the best since 1977 and every sector is displaying much greater confidence. That shows that Government policies are benefiting manufacturing.

Mr. Merlyn Rees: Is the Minister aware that a particular example of the decline can be seen in south Leeds, which was the manufacturing core of that great city? The industry has been in decline there in recent years. Is it now the perceived wisdom that manufacturing industry will never come back again and that it is all over and done with?

Mr. Lamont: Of course that is not the perception. It is very much the Government's intention that the country should have a strong manufacturing base. That is borne out by the results shown in the CBI survey, which shows that manufacturing is participating fully in the recovery and that in 1984 manufacturing grew more quickly than the economy as a whole.

Mr. Kenneth Carlisle: Exports are encouraging, but if we are to build on that tentative improvement we shall have to remain competitive. Is my hon. Friend not worried about the growing signs of protectionism around the world? Does that trend not reinforce the need for a round of GATT talks very soon in order to stop the growth of protectionism, which will damage our jobs and exports?

Mr. Lamont: I am sure that my right hon. Friend the Minister for Trade will note what my hon. Friend says.

Mr. McLennan: Does any member of the Government know anything about major manufacturing industry? If not, will the Government listen to those who do, such as Mr. Harvey-Jones of ICI and Lord Weinstock?

Mr. Lamont: I will certainly listen to what the chairman of ICI says, especially about pay restraint. I noted what Mr. Harvey-Jones said the other day, and I agreed with some of his comments. I agree that one of the concerns of the manufacturing sector is the level of electricity prices. That is why we need a competitive coal industry—one one of the aims for which the Government have worked very hard.

Mr. Favell: Is it not true that there are bags of opportunities in our home market as well as opportunities for exporters? If only our motor manufacturers, for instance, took the same proportion of our home market as the French, the Germans and the Italians take of theirs, we would have the answer to the question, "Where are the jobs to come from?"

Mr. Lamont: My hon. Friend is absolutely right. I am sure that he is well aware that every 1 per cent. of penetration of the domestic market is equivalent to a quarter of a million jobs. If only we could hold back the tide of imports, employment would rise.

Mr. Geoffrey Robinson: The Minister's complacency will be taken very badly by British manufacturing industry. Is he not aware that manufacturing output is still 10 per cent. below what it was when the Government came to power in June 1979? That is a bigger drop than has been suffered in any other industrial country, and the biggest drop since the war. Is he not thoroughly ashamed of that disgraceful record?

Mr. Lamont: I would take the hon. Gentleman's comments more seriously if he acknowledged that manufacturing output fell sharply between 1974 and 1979. I was referring not to what the Government thought about the future of business but to what business men themselves see as the future for employment, investment, output and exports.

Small Firms Counselling Service

Mr. Silvester: asked the Secretary of State for Trade and Industry if he will make a statement on the continuing role of his Department's small firms counselling service in the light of the growth of the local enterprise agency movement.

Mr. Trippier: The work of the small firms counselling service is being reorganised to operate increasingly through and in partnership with local enterprise agencies.

Mr. Silvester: Is it my hon. Friend's intention therefore to change the objectives set for the counselling service?

Mr. Trippier: I see a continuing role for the small firms service in giving its excellent advice to existing small businesses and start-ups. I hope that, over time, the local enterprise agencies will concentrate more on startups, leaving the resources of the small firms service to be concentrated in the area of special skills and also on the up-market counselling that it does so well.

Mr. Pavitt: Will the Minister give further consideration to the work in this field of the Co-operative


Development Agency, which the Government supported last year? The small workers' and service co-operatives are now growing rapidly, and they need counselling in both marketing and accounting if they are to survive.

Mr. Trippier: I know of the hon. Gentleman's interest in co-operatives. As I have said before, we are very anxious to support them. We have put the taxpayer's money where our mouth is by supporting the Co-operative Development Agency. We are funding it for the next six years to the tune of £200,000. More than 1,000 co-operatives have now been established in the country, but that figure must be compared with a total of 1·4 million small firms and 2·5 million self-employed. The £200,000 that we give the Co-operative Development Agency every year should also be contrasted with the £75,000 that we give to Business in the Community, which relates to the local enterprise agency movement. Business in the Community helps the local enterprise agency movement in many ways. We are incredibly generous to the Co-operative Development Agency.

Mr. Bellingham: Is my hon. Friend aware of the excellent work of the small firms service in west Norfolk. and in particular the work of Dr. John Knights? If my hon. Friend is to integrate the work of the small firms service into the local enterprise agencies, is there a continuing role for it as a separate entity?

Mr. Trippier: My hon. Friend used the word integrate, but I prefer to use the word complementary in describing the way that the two services will operate. I envisage a continuing role for the small firms service and I do not envisage a time when we can do without it. It has doubled over the past two years. The expertise in the counselling teams, which are composed, as my hon. Friend knows, of industrialists and not civil servants, would be difficult to find in local enterprise agencies. Therefore, the roles are complementary.

Mr. Williams: Some of these agencies are undoubtedly doing an excellent job, but does the Minister recognise that many of them are virtually talking shops? Is the Department carrying out a cost-benefit analysis of their work, and is any consideration being given to the establishment of some objective standard of performance?

Mr. Trippier: I am surprised that the right hon. Gentleman should frame his question in that way. I am sure he will realise on reflection that the local enterprise agencies would be offended at being called talking shops. The only shops that one could connect with the local enterprise agencies movement stems from the fact that we are anxious that, within the communities, they should be one-stop shops. A survey has been conducted by Business in the Community, which shows that the movement is extremely successful. Another recent survey conducted in Scotland shows that where there are local enterprise agencies there can be a reduction in the level of unemployment by about 2 per cent.

Steel Scrap

Mr. Canavan: asked the Secretary of State for Trade and Industry how many representations he has received about the export of steel scrap.

Mr. Norman Lamont: Since 1 January Department of Trade and Industry Ministers have received 54 letters and telexes about the export of steel scrap. I have also met delegations that have referred to this subject.

Mr. Canavan: Is the Minister aware that in the first two months of this year scrap prices rose by over 40 per cent., largely because subsidised industrialists in other countries such as Spain are buying imported scrap at inflated prices and thereby pushing up the international market price? In view of the resulting threat to the British foundry industry, will the Government intervene now to deal with this, instead of tolerating a threat to foundry workers' jobs brought about by the Government's doctrinaire worship of free market forces?

Mr. Lamont: I agree with the hon. Member that the Spanish subsidy is an important aspect of the problem. This is being raised through the EEC and is being studied, and we are seeing what can be done about it. However, I do not agree with the hon. Gentleman that the answer to the problem is to impose controls on the export of scrap. That would not be effective if it were carried out in one country alone. Other countries in the EEC are strongly opposed to scrap control. Secondly, we have to take account of the needs and interests of the steel scrap industry as well. It is an important industry here, employing 100,000 people and making exports of £300 million a year. We cannot just shift the burden of the problem from one sector to another.

Mr. Michael Marshall: Does my hon. Friend accept that part of the problem for the steel scrap industry is continuity, that many of the contracts entered into are long-term contracts, and that any suggestion of controls and turning the tap on and off would destroy confidence in the industry, the importance of which to the economy my hon. Friend has just outlined?

Mr. Lamont: I agree with my hon. Friend. A point that I should perhaps have added to what the hon. Member for Falkirk, West (Mr. Canavan) said when he quoted the figures on prices, comparing the latest month's with January, is that the recent trend has been for quite a reduction in prices. In April, prices of the main grades were £65 a tonne compared with £85 a tonne in the previous month. We have to see what happens in the market, but those price increases are from a very low level and in real terms are not all that different from those obtaining in 1979.

Mr. Roy Hughes: As I am one of the 54 who have made representations to the Minister on behalf of a private enterprise firm in my constituency, will he appreciate that it is not sufficient to turn a blind eye to this situation, otherwise more firms will go the the wall, with consequent redundancies?

Mr. Lamont: Of course we must not turn a blind eye to the situation, and the 54 representations ensure that we cannot do that. The hon. Gentleman must also look at the interests of the scrap industry. Just because one industry is facing a problem, we cannot shift the burden of that on to another industry. There may be a problem of price. There is not a problem of an overall shortage of scrap, and it is to a shortage that the provisions for controls within the ECSC treaty relate. There is not a shortage of scrap at present.

Mr. Hardy: Does the Minister accept that as far as the special steels industry is concerned nationally, and certainly the special steels industry in my constituency, the problem continues to be grave? Would it not be wise for the British Government to recognise that the Spanish Government are serving the interests of Spain, and that it is about time that this Government began to serve the interests of Britain?

Mr. Lamont: I have acknowledged that the Spanish problem is serious. That has to be examined in the context of Spain's accession to the EEC, and it is being examined. This matter was raised at the last Council of Steel Industry Ministers. We cannot impose controls unilaterally. The hon. Gentleman must recognise that there are other countries in Europe which are firmly opposed to the imposition of scrap controls. What would be the point of scrap controls imposed on one country if it exports to another country, which then exports out of the EEC? Such a gesture would make the hon. Gentleman feel better, but it would achieve nothing.

"Support for Business"

Mr. Thurnham: asked the Secretary of State for Trade and Industry what responses he has received following the publication of his advisory booklet, "Support for Business".

Mr. Trippier: Over 200 telephone calls a week about DTI assistance are being received at the new London central inquiry point. Regional inquiry points are also receiving many calls.

Mr. Thurnham: In congratulating my hon. Friend on his initiative, may I ask whether he expects the supplementary leaflets to be available when he makes his welcome visit to Bolton during Local Enterprise Week?

Mr. Trippier: We have already produced the leaflet on support for innovation. We hope that shortly we will produce the leaflet on support for investment. I shall certainly try to get it out in time for my visit to Bolton during Local Enterprise Week.

Mr. Wainwright: When will the Minister get the Prime Minister to understand that no amount of small, detailed schemes for the alleged support of industry can possibly compensate for the appalling burden of interest rates that are persistently higher than those of all our competitors, except Italy, the overbearing domination in the market of cash-rich, huge companies, which support the Government financially or otherwise, and, above all, the lack of purchasing power among the unemployed and the other millions of poor families in the country?

Mr. Trippier: I think that the hon. Gentleman may have framed his question yesterday before having read this morning's newspapers. The Financial Times of today states:
Small companies' confidence about general trading prospects improved markedly in the first quarter of this year, says a survey due out today. There is a strong upturn in the number of groups expecting to employ more staff, and a revival in investment plans, the study says.

Mr. John Mark Taylor: Would my hon. Friend care to comment on whether there is another thing that businesses need, not least small businesses, which is to be left alone, especially by local government?

Mr. Trippier: Wherever I go on my regional visits, I seem to be given conflicting advice from any audience that I address. On the one hand, there are people who say to me, "Let's have some more money"—or that is what they really mean when one takes off the fancy wrapping. That is the bottom line. That is, of course, taxpayers' money. In seemingly direct contrast to that, I get messages saying, "For goodness' sake, get out of our way, get off our backs and allow us to run our businesses in the way that only we can do." That is why we conducted the burden scrutiny exercise and that is why we published "Burdens on Business", and we hope to carry forward those initiatives to cut out the red tape and to free small business men from being prisoners of their in-trays.

Departmental Employee (Background)

Mr. Winnick: asked the Secretary of State for Trade and Industry if he will make a statement on the latest position regarding the civil servant in his Department whose Nazi background has been looked into.

Mr. Tebbit: The inquiries undertaken by the Department have revealed no grounds for disciplinary action against this officer.

Mr. Winnick: Is it not strange that someone with such a known notorious background should have been taken on by the Department in the first place? Is the right hon. Gentleman aware that while someone who, for example, is a supporter of CND might be described by those who do the vetting or interviewing as a subversive, the person who is the subject of my question is a civil servant and, as the right hon. Gentleman has just said, will continue in that job?

Mr. Tebbit: The hon. Gentleman is making a serious mistake in the line of his questioning. He should understand that two problems may arise in relation to the political views and activities of a civil servant or a potential civil servant. One is whether he or she may or may not be a subversive—that is, a potential traitor to this country.

Mr. Winnick: That is only one among many.

Mr. Tebbit: Exactly, that is one consideration that may apply. A second and broader consideration is that, whatever political views an official may hold, he is, within the limits of certain ranks of the Civil Service, debarred from active participation in national politics or from intervening publicly in matters of national, partisan controversy. This gentleman fell into neither of those categories.

Mr. Winnick: He is all right, then?

Mr. John Smith: Is the Secretary of State aware that the Minister for Trade told me in a letter that the Government confirmed
that the Civil Servant in question attended meetings at a London hotel earlier this year regarding the formation of a new Right-wing organisation.
However, the view is taken by the Government that since the meetings to form this new Right-wing organisation were held in private, no rules were broken. Is it seriously the Government's position that, provided political activity does not take place in public, it is permitted under the rules?

Mr. Tebbit: There is nothing to prevent an official holding views or going to a meeting to listen to those who


hold similar views or discussing his views in private. If we went to the extent of saying that the mere expression of an unpopular political view in private should be cause for dismissal from the Civil Service, we should be going a long way down a road which I think the right hon. and learned Gentleman and most of us would regret. I find the views of extremist Socialists, whether they are National Socialists or any other kind, extremely displeasing——

Mr. Winnick: You despicable man.

Mr. Tebbit: —but that should not give one the right to dismiss a person for holding such views.

Mr. Heffer: On a point of order, Mr. Speaker.

Mr. Speaker: I shall take points of order after Question Time.

Japan

Mr. Richard Page: asked the Secretary of State for Trade and Industry what are the prospects for trade with Japan.

Mr. Tebbit: United Kingdom exports to Japan in 1984 rose by 16 per cent. on the previous year, to almost £1 billion. I hope to see this favourable trend continue, but much will depend on the effectiveness of the Japanese Government's 9 April import promotion package and on the continued efforts of exporters.

Mr. Page: I thank my right hon. Friend for that reply. Despite the restrictive practices of the Japanese, how do we compare with other would-be exporters, such as Germany, to Japan? Are all countries being treated equally unfairly?

Mr. Tebbit: All countries are finding it equally difficult to export to Japan. We do not have figures on a strictly comparable basis from our own sources, but according to Japanese figures, which differ slightly from ours in some respects, we have been doing rather better than the Germans in increasing our exports—our exports and imports are of the same order as those of the Germans—and we have been doing better than the French, whose exports to Japan fell last year.

Mr. Roger King: Does my right hon. Friend agree that one can lead a horse to water, but one cannot make it drink? In other words, unless our goods are what the Japanese people, as opposed to the Japanese Government, want, they are not likely to buy them. Does he further agree that we should equally ensure that our goods are better than Japanese goods?

Mr. Tebbit: Yes, indeed. The essence of a successful economic system must be competitiveness. In some areas our goods are selling extremely well in Japan. For example, Wedgwood china is selling so well there that Japanese manufacturers come as near as they dare to counterfeiting it in their imitations of the styling and the manner of marketing. So that is a clear case where competitiveness can pay.

Mr. Skinner: Is the Secretary of State aware that these talks with the Japanese have been going on for many years, when a previous Tory Government were in office and when a Labour Government were in office and that the Japanese managed to string those Governments along by saying that they were going to change things a little bit

later, but not just now, in favour of Britain? Will the right hon. Gentleman also bear in mind that one of the factors that enables British people to buy Japanese goods is that we are surrounded by hypocrisy? Is he aware, for instance, that at the time when the leader of the Liberal party was saying "Buy British" he was driving a Japanese car and that he stopped driving it only when he found that the British School of Motoring was to give £188,000 to the Liberal party, when he started driving a British car?

Mr. Tebbit: The hon. Gentleman is, as ever, amusing and, as ever, of course, he is deeply conscious of being surrounded by hypocrisy.

Small Firms (Marketing Advice)

Mr. Andy Stewart: asked the Secretary of State for Trade and Industry whether he is satisfied with the level of advice on marketing available from his Department to small firms.

Mr. Trippier: No, Sir.

Mr. Stewart: I thank my hon. Friend for his reply. Will he say what he intends to do to assist more firms with their marketing problems?

Mr. Trippier: I am very conscious of the importance of marketing as one of the key elements in running a successful business of any kind. We have a golden opportunity to run a pilot marketing scheme in certain areas as a result of the non-quota ERDF money that is being made available in the steel, shipbuilding and textile areas. We are obviously very anxious to monitor how that marketing scheme is working within the business improvement service package to establish what degree of success has been achieved.

Mr. Meadowcroft: Is the Minister aware that many voluntary bodies have established small businesses, which are helping to create employment, and that they could do a lot more if they were assisted with marketing within the voluntary sector? Is he aware that one of the biggest frustrations is the lack of liaison between the MSC, which often provides initial funding, and his Department, which seems not to be aware of the developments within the voluntary sector and the general problem that responsibility for assistance to the voluntary sector is split among so many Departments? Will he take responsibility for co-ordinating the activities of voluntary bodies to create employment and marketing?

Mr. Trippier: I should certainly like to look in greater depth at the problem which the hon. Gentleman has outlined. An initial suggestion, which might prove helpful, is that those voluntary organisations should get in touch with the small firms service, because what I omitted to say earlier is that there is a degree of marketing skills within these small firms counselling teams.

Sir Dudley Smith: Is my hon. Friend aware that many small firms within my constituency and elsewhere would be much more successful in their marketing if they could get better help and support from the banks? Will he look at that question?

Mr. Trippier: There is no doubt in my mind that over recent years the main clearing banks have proved to be more helpful and flexible than they had been in the past. Certainly my mail bag is full of complaints about the


banking system and, perhaps, a degree of inflexibility on the part of the banks. Although I am not standing at this Dispatch Box to defend the clearing bank system in any way, I must point out that it would have been impossible, for example, for us to get the loan guarantee scheme off the ground without the support of the banks, and I very much welcome that support.

Overseas Projects Board

Mr. Dalyell: asked the Secretary of State for Trade and Industry what response he is making to the representations made by Mr. Roy Withers, chairman of the Overseas Projects Board, about the nature of Government support for the board; and if he will make a statement on the level of Government support for the board.

Mr. Channon: I shall be discussing its views at a future meeting.

Mr. Dalyell: What consistent support is this country going to give, in terms, for the capital goods industries to make sure that they are no worse than terms offered by our industrial competitors?

Mr. Channon: As the hon. Member will know, we give a great deal of help. There is the projects and export policy division of this Department, which is engaged in trying to help project business; we have the fixed rate export finance scheme by ECGD and we also have the aid and trade provision, which has gone up from £36 million to £66 million a year. So quite a lot of support is given and, in fact, we have won a great many projects.

Steel Industry

Mr. Roy Hughes: asked the Secretary of State for Trade and Industry when he will be meeting the chairman of the British Steel Corporation to discuss the corporate plan for the steel industry.

Mr. Norman Lamont: BSC has only recently been in a position to resume its normal corporate planning process, and at present my right hon. Friend has no specific plans for an early meeting with the chairman to discuss the corporate plan.

Mr. Hughes: Does the Minister appreciate that there is concern at the Llanwern steelworks about the failure to

give the go-ahead for the concast project? Therefore, will he press the chairman over this issue, bearing in mind that the works has beaten all efficiency and production records in recent years—a trend, presumably, which the Government are trying to encourage?

Mr. Lamont: The hon. Gentleman has raised this matter several times at Question Time and at Welsh Questions. As he knows, it is a matter for the corporation to put to the Government, and the corporation has not done that as yet.

Mr. Hickmet: Will my hon. Friend confirm that the Government's policies in relation to the BSC have been highly successful and have led to increased profitability, increased productivity, and a position in Europe which enables it to compete effectively with almost every other European steel producer?

Mr. Lamont: I hope that the Government's policies have contributed to the success of the BSC. The progress on productivity has been dramatic. We have equalled and surpassed the levels in France and Germany and done our restructuring. The BSC project is now poised to reach viability. It is a tribute not only to the Government but to the management and all those who work in the corporation.

Mr. Heffer: On a point of order, Mr. Speaker.

Mr. Speaker: I shall first take Question No. 46.

Mr. Heffer: On a point of order, Mr. Speaker.

Mr. Speaker: Order. I said that I would take the hon. Gentleman's point of order after Question Time.

Mr. Heffer: I am entitled to raise a point of order, Mr. Speaker.

Mr. Speaker: The hon. Gentleman is entitled to raise it, but I am entitled to say when I will take it, which is after Question Time.

Mr. Heffer: rose——

Mr. Speaker: Order. I ask the hon. Gentleman to bear with me. I have said that I will take his point of order after Question Time, and I certainly will. We have one more question in Question Time to the Secretary of State for Trade and Industry, and that is No. 46.

British Aerospace

The following question stood upon the Order Paper:

Mr. Timothy Wood: To ask the Secretary of State for Trade and Industry if he will make a statement on his Department's proposal to sell its residual shareholding in British Aerospace.

The Minister for Information Technology (Mr. Geoffrey Pattie): The Government's residual shareholding of 96,852,746 ordinary shares, together with 50,000,000 new ordinary shares issued by the company, are being offered for sale at a price of 375p per share, of which 200p will be payable on application and 175p by 10 September 1985. All the offered shares have been underwritten. The offer will close on 10 May 1985.
Applications for all the offered shares have been received from priority applicants, who have been guaranteed allocation of 55 per cent. of the shares they have applied for. The remaining 45 per cent. are available for applications by the public subject to the preferential entitlements of existing shareholders and eligible employees of the company.
Copies of the prospectus for the offer have been placed in the Library.

Mr. Wood: I am delighted that the sale of the British Aerospace shares is going so satisfactorily. I hope that many workers within the industry will take up shares. Will my hon. Friend say whether he thinks, as I do, that this sale of shares is widely welcomed within the aerospace industry as a whole?

Mr. Pattie: I am grateful to my hon. Friend for his comments. I am sure that the sale of the Government shareholding has been welcomed by the company, because British Aerospace has demonstrated its ability to operate profitably in the private sector. I am sure that the aerospace industry as a whole—and, indeed, the whole country—will benefit from the return of the company to full private ownership.

Mr. Bruce Millan: Is the Minister aware that today's statement is a further breach of the undertaking that the Government gave at the time of the sale that they would retain at least 25 per cent. of the shareholding? Virtually the whole of the profits of the company come from military orders, which are largely dependent upon public funding. There is a very considerable national interest involved and it is being abandoned by the sale. Far from that being welcomed, there will be widespread anxiety in the country about this further handing over of a national asset to private interests.

Mr. Pattie: I refute totally what the right hon. Gentleman has said. It is not a question of abandoning a national interest. He will be aware of what was said in 1981 before the first stage of privatisation took place—that no further move would be made for the foreseeable future. It was indicated then that it would be in a year or two, and that the special share—details of which are set out in the prospectus, which I invite the right hon. Gentleman to read—would totally safeguard the national position, the special share being vested, as the right hon. Gentleman well knows, in my right hon. Friend the Secretary of State for Trade and Industry.

Mr. Paddy Ashdown: Will the Minister say why he believes that the sale of the shares will make British Aerospace more efficient? Is it not the case that British Aerospace has difficulty over dealing with its European partners, both in collaboration and in competition, because they have more Government support than is provided to our industries? Does not the sale of these shares have more to do with raising Government money than with making one of our primary defence industries more efficient?

Mr. Pattie: No, it certainly does not have anything to do with that issue. If the hon. Gentleman cares to consult the company, which I am sure he will, he will discover quite quickly that it is extremely pleased not only that there should be a rights issue but that the shares should be made freely available on the market, thus indicating to the world at large that it is not dependent for its success upon a major Government shareholding.

Mr. Henry Bellingham: Is my hon. Friend aware that many small shareholders who before the British Telecom sale had probably never heard of shares will welcome today's announcement? Can he say what special measures he will take to ensure that the small shareholder is favoured in the allocation?

Mr. Pattie: Our attitude is favourable towards the interests of the small shareholder. However, my hon. Friend will appreciate that until the offer has been subscribed we cannot make any statement about the basis of allocation.

Mr. Doug Hoyle: Will the Minister confirm that this company cannot be profitable without Government support? It is entirely dependent upon Government money. Is it not nonsense to sell off in this manner a high technology company whose future will be at risk if it has to depend upon the private market? Should it not therefore be retained in the public sector?

Mr. Pattie: No, it should not. The hon. Gentleman is doing a great disservice to British Aerospace by describing it as being dependent upon Government support. It is not dependent upon Government support. There is a world of difference between the Government contracts and the export business of British Aerospace, which amounts to 63 per cent. The hon. Gentleman conveniently ignores that non-governmental business.

Mr. Tam Dalyell: To follow up the question of my right hon. Friend the Member for Glasgow, Govan (Mr. Millan), does the special share provide any kind of permanent guarantee? Are the promises to be honoured?

Mr. Pattie: I refer the hon. Gentleman to the prospectus, where the details are set out exactly. I shall not detain the House by reading out the summary of rights and restrictions attaching to the special share. They are to be found in paragraph 7 of the statutory interests section. I can assure the hon. Gentleman and the House that it safeguards the national interest.

Mr. Robert Maclennan: What proportion of the remaining tranche to be sold has been reserved for employees?

Mr. Pattie: We have reserved 5 million shares for employees.

Mr. John Smith: Is the Minister aware that the main reason why the Government are proceeding with the sale is the need by the Treasury to raise more money and that this has been placed far ahead of the efficiency or profitability of the industry?
Secondly, is it not clear that the Government are breaking a pledge which they gave to the House? When the legislation was being discussed the Government told the House of Commons that they would retain 25 per cent. of the shareholding. There was no mention at that time of a golden share. It was only after the Government decided to renege on their commitment to the 25 per cent. that they pushed the golden share into place.
Thirdly, will the Minister tell us whether Kleinwort, Benson, the bankers handling the sale, will on this occasion allow its employees to buy shares, as the Government have confirmed happened in the case of British Telecom, which, surprisingly, appears to have been approved of by the Government?

Mr. Pattie: The purpose of the undertaking that was originally given—that 25 per cent. of the shares would be retained—was to block any change in the articles of association dealing with foreign ownership. As the special share will be equally effective in achieving that purpose, there is no reason to retain the 25 per cent. shareholding.
As for the merchant bank advisers, may I remind the hon. Gentleman that Kleinwort, Benson is advising British Aerospace; it is not advising Her Majesty's Government. The Government are being advised by Lazard Brothers which has intimated to us that the staff who are directly involved in this exercise will not be allowed to participate in the offer.

Questions to Ministers

Mr. Eric S. Heffer: On a point of order, Mr. Speaker. I raise this point, on reflection, more in sorrow than in anger. My first reaction was one of anger, but I think that the Secretary of State for Trade and Industry, who equated all Socialists with National Socialists, must have been ignorant and did not understand the nature of the struggle against Nazism.
Will the Secretary of State apologise to hon. Members and to the country for equating National Socialists with democratic Socialists, who fought, arms in hand, against the Nazis and laid down their lives? During the second world war, the deputy Prime Minister of this country was a member of the Labour party and a democratic Socialist. Thousands of my colleagues, who, like me, joined the forces at the age of 19, laid down their lives. They were democratic Socialists, and we find it offensive for any individual—especially the Secretary of State, who has suffered at the hands of certain people—to make that sort of allegation against democratic Socialists who died in the fight against Fascism.
I ask for an apology from the Secretary of State. I hope that he will retract his statement. I am sure that he will recognise, on reflection, that he made a grave error.

The Secretary of State for Trade and Industry (Mr. Norman Tebbit): Further to that point of order, Mr. Speaker. I am happy to help the hon. Member for Liverpool, Walton (Mr. Heffer). He would have a good point of order if I had said what he, in his excitement, believed that I had said.
I referred to the views of the gentleman—one of my officials—who was described by the hon. Member for Walsall, North (Mr. Winnick) as having a Nazi background. As the House will know, "Nazi" is a shorthand term for the National Socialist German Workers party and I expressed my distaste for extremist Socialist views—I should be happy to make that "anti-democratic extremist Socialist views"—of any kind, whether they are National Socialist or other versions of Socialism.

Mr. Anthony Beaumont-Dark: Further to that point of order, Mr. Speaker. Perhaps you can help me. On question No. 10, which you may recall was about a particularly loathsome individual, Mr. Denis Pirie, it was said that his views were silly. They were not silly——

Mr. Speaker: Order. I hope that the hon. Gentleman is not trying to perpetrate something of which we are not in favour, which is to put a supplementary question that he was not called to ask during Question Time.

Mr. Beaumont-Dark: With your indulgence, Mr. Speaker, may I finish my question, which I believe is important? You must have read Mr. Pirie's views. They were not silly; they were evil. Do you think it right that on the great point of principle about whether the views of a man working for a Government Department are silly or evil only one supplementary question should be allowed? How do you judge what is an important question?

Mr. Speaker: As the House well knows, I make a judgment in these matters and I have to take into account


other questions on the Order Paper and the broad, important issues that they involve. I made that judgment today.

Mr. David Winnick: On a point of order Mr. Speaker.

Mr. Speaker: Order. The hon. Gentleman asked his question earlier, and I hope that we are not about to pursue the matter.

Mr. Winnick: Yesterday, Mr. Speaker, you made a plea for moderation of language. In the light of that, would it not be helpful if the Secretary of State for Trade and Industry did not come here with his poisonous tongue?

Mr. Speaker: I think that that is an unworthy accusation, as the Secretary of State has made an apology.

Mr. Bowen Wells: On an entirely different point of order, Mr. Speaker. You gave my hon. Friend the Member for Stevenage (Mr. Wood) the privilege of asking question No. 46 after the official end of Question Time. I am deeply envious of that privilege and I wonder whether you can advise me as to how I may promote my questions in that way.

Mr. Speaker: I did not grant it. It is up to Ministers to say whether they wish to answer a question at the end, but it is a well-established practice.

Mr. Stuart Bell: I am anxious not to prolong the proceedings, but I believe that in the response of the Secretary of State for Trade and Industry to the point of order raised by my hon. Friend the Member for Liverpool, Walton (Mr. Heffer) no apology was actually made. Moreover, the right hon. Gentleman continued to relate National Socialism to democratic Socialism when National Socialists have nothing to do with Socialism.

Mr. Speaker: I heard clearly what the Secretary of State said, and at this particular time, 40 years on from a war in which the hon. Member for Liverpool, Walton (Mr. Heffer) and many other Members, including myself, were involved, I think that we should leave the matter there.

Commercial Rate Limitation (Scotland)

Mr. Archy Kirkwood: I beg to move,
That leave be given to bring in a Bill to empower the Secretary of State for Scotland to set a ceiling on increases in rateable value imposed by assessors on commercial premises in the course of revaluations in Scotland; to make emergency powers available in the short term to provide assistance to those commercial ratepayers whose commercial viability is threatened by rate cost increases of more than 25 per cent. as a direct result of revaluation: and for connected purposes.
The Bill is necessary for a number of good and cogent reasons. Equally important, however, is the need for the Government to act or at least to make their position clear immediately. In this context, that means that decisions must be taken and announced within the next two weeks. In my view, if an announcement is not made before the Conservative party conference in Perth. it will be too late. A financial formula must be found to give some hope to the thousands of commercial ratepayers, both large and small, who face rate increases for 1985 of the same magnitude as their net profits for 1984.
This month, businesses will face the first instalment of the 1985–86 rates. Although some increase in the commercial rate burden has been anticipated in their budgets, it is unreasonable to expect businesses to have anticipated the extent of the increases. Many are now unable to draw up realistic budgets which will balance for 1985–86 and are being told by their financial advisers that they are no longer viable as a direct result of the rate increases. If nothing is done between now and mid-May, business men will have to choose between substantial staff lay-offs, at best, or total closure, at worst. The Bill is thus no academic contribution to the current debate about the need for rate reform. It seeks to throw an emergency lifeline to business men on the brink of going under for good.
It is now widely agreed that the combination of the reductions in rate support grant suffered by local authorities in recent years and the recent revaluation have produced an unexpectedly heavy burden on ratepayers in general. The Government recognised that in relation to the domestic sector by bringing forward a welcome increase in domestic rate relief to the extent of £38·5 million. When that relief was given, Ministers were still making soothing, platitudinous noises about the increased burden on commercial ratepayers, basing their argument on the average figures available at that time. We were told that on average commercial ratepayers in Scotland would suffer increases of 1 per cent., 2 per cent. or perhaps 3 per cent. We were also told that there would be winners as well as losers—that applies to Russian roulette, too. The Government also said that individuals who believed that they had been assessed unfairly could resort to the appeals procedure, but I submit that Ministers can no longer hide behind average increases which disguise wildly fluctuating individual increases.
The detailed information in the draft valuation rolls is not yet generally available because they will not all be published until the end of May or early June. However, there are specific examples of individual increases, sometimes concentrated in discreet localities. They have exploded the myth that there is no problem: there is a very real and urgent problem, as can be shown by referring to only a few examples.
I begin in the northernmost part of the United Kingdom, and quote, courtesy of the Shetland chamber of commerce, a camera shop which in 1984 paid rates of £500; in 1985 it is expected to pay £2,712. The only way to meet that increase is by selling extra cameras and film, but there is no way in which that can be done. It is quite unrealistic for such increases to be borne by shops.
I have two specific problem areas in my constituency. One is the market square in Kelso and the other in patches of the new developments in Hawick, where rate bills have increased by 100 to 150 per cent. Those are cost increases, not changes in rateable value.
I am told that the position is even worse in Perth, and worse still in Edinburgh with sevenfold increases in rateable value producing increases of 10 or 12 times in the amount of cash having to be paid.
This morning I was interested to receive some information from the director of finance, Mr. Kenneth Patterson, who said in a letter to his regional councillors that the average increase in rates payable had been split according to the following categories and in the following ways: the domestic increase across the Strathclyde region is, on average. 21·6 per cent.; industrial subjects have been decreased by 3·8 per cent.; shops have increased by 38·7 per cent., offices by 25·6 per cent., hotels by 22·7 per cent., and other commercial subjects, which include wholesale warehouses, bonded stores and retail warehouses, have been decreased by 16·9 per cent. The Strathclyde finance department reckons that the rates to be collected due to the expenditure increase in its budget and other matters are 11·4 per cent., so anything over that figure in the categories mentioned will be a direct result of revaluation. That explodes the myth that the commercial sector is suffering an average increase in the low, single-digit range.
This does not affect only small business. Information has been given to me by a major shoe retailer which has 138 outlets throughout Scotland, shops with household names. In its 1985–86 budget it assumed a 10 per cent. increase in rates, which made a figure of £728,000 for rates payable. The rate demand that it has received indicates an average 54 per cent. increase in rates, giving a figure of £1,028,000 in rates payable. Increases of that order will mean either closing 30 of the smaller branches, making about 120 employees redundant, or raising the prices in Scotland, which would mean a differential price structure. The same shoes would cost 3 per cent. more in Scotland than in England.
I pay tribute to the work being done by the Scottish branch of the National Federation of Self-Employed, which is doing its best to assist individual businesses that have been affected by the increases. I turned to that organisation in desperation when trying to seek redress for some of my constituents in Kelso and Hawick, and it was through its instigation that I conceived the scheme for selective rate relief which is enshrined in the Bill.
The Government claim that they have no legal machinery available to provide selective relief in the commercial sector. I acknowledge that, and this Bill seeks to provide the bones for that machinery. I do not make any extravagant claims about it—adjustment may be necessary in the suggested relief threshold of 25 per cent. There may be difficulty in defining commercial subjects. There may be problems also in designing a detailed test for need.
I am prepared to listen to the Government's arguments when we come to consider the Bill's detailed provisions. However, I am convinced that there is a need for urgent legislation. Given the political will, I am sure that a measure of selective rate relief in the commercial sector could be made available forthwith.
There is no prospect of salvation by means of the appeals procedure and it is not good enough for Ministers to use that as an excuse for legislative inactivity. The appeals procedure, like the original assessments, pays no regard to enterprises' ability to pay. It will be cruelly to raise false hopes to recommend appeals as a remedy for the ills that some businesses are suffering. The appeals procedure is hopelessly overburdened and it will take years to sort it out. Moreover, commercial subjects will have to wait until all the domestic appeals have been dealt with.
The Government have no alternative but to produce the necessary primary legislation to find the £4 million or £5 million needed to mount the rescue package. My right hon. and hon. Friends and I would give any such scheme our enthusiastic support. If the Government bring forward the necessary legislation, they will still be able to rescue hundreds of small businesses from extinction. If they do not, the Secretary of State might just as well take a bulldozer to many of the high streets of small and large towns in Scotland, and he will deserve richly the political retribution that will be visited upon him. If he does nothing, he will deserve everything coming to him.

Question put and agreed to.

Bill ordered to be brought in by Mr. Archy Kirkwood, Mr. Malcolm Bruce, Mr. Roy Jenkins, Mr. Russell Johnston, Mr. Charles Kennedy, Mr. Robert Maclennan, Mr. David Steel and Mr. James Wallace.

COMMERCIAL RATE LIMITATION (SCOTLAND)

Mr. Archy Kirkwood accordingly presented a Bill to empower the Secretary of State for Scotland to set a ceiling on increases in rateable value imposed by assessors on commercial premises in the course of revaluations in Scotland; to make emergency powers available in the short term to provide assistance to those commercial ratepayers whose commercial viability is threatened by rate cost increases of more than 25 per cent. as a direct result of revaluation; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 10 May and to be printed. [Bill 138.]

Public Accounts

Motion made, and Question proposed,

That this House takes note of the Twenty-Fifth Report from the Committee of Public Accounts in the last Session of Parliament on Financial Assistance to De Lorean Motor Cars Limited (House of Commons Paper No. 127 of Session 1983–84) and of the Northern Ireland Department of Finance and Personnel Memoranda on that Report (Cmnd. 9374 and House of Commons Paper No. 199 of Session 1984–85).—[Mr. Major.]

Mr. Robert Sheldon: First, I thank the Government for finding time for a debate on the affair that led to the De Lorean expansion in Northern Ireland and its subsequent demise. I am grateful to the Financial Secretary to the Treasury for being in his place. A number of the arguments which I and others will advance will be directed to the Treasury and the lessons that it can learn from the experience of the De Lorean enterprise.
This is an especially important debate, but we shall have our normal annual debate on the PAC reports in due course. That debate will embrace all the matters with which the PAC has dealt over the year, but I hope that it will encompass fewer reports than have been before the House in the past. In the meantime, the report before us is an exceptionally important one.
I must thank my colleagues for their efforts over a long and difficult inquiry. They pursued the issue with astonishing assiduity over a long period. Every weekend seemed to be occupied in reading voluminous sheafs of paper. The questioning of my colleagues added enormously to the understanding that we were able to attain. I thank also the Comptroller and Auditor-General of Northern Ireland and his Department. It is not normal to have major issues that involve the CAG of Northern Ireland and his Department, but in this instance we were extraordinarily well served. My colleagues and I are grateful for the way in which the CAG of Northern Ireland and his Department conducted their affairs and produced the resumés, briefs and information to us.
Finally, I thank the Clerk of the Committee and the witnesses who gave evidence. Also, rather exceptionally, I wish to thank Messrs Fallon and Srodes for their book. It is rare for the Public Accounts Committee to consider a matter that has already been dealt with in a book published for general sale, especially in a paperback edition. We believed it to be so valuable that we produced a copy for each member of the Committee so that we could compare the historical narrative with the detailed points that we were able to adduce.
The report is not the final assessment of the De Lorean affair, and we knew from the beginning that it could not be. We knew that we could not uncover several matters. We could have come to the view that we should wait until further information came to light, but we did not. We decided that as there were so many important lessons to be learnt, and as we might have to wait several years before some matters came to light, the report could not wait that long. Much more important than attributing blame is the fact that there are lessons to be learnt, not only in the Northern Ireland Department, but in the entire Government machinery. That must always be our first priority.
The importance of that is shown by our use of language in demonstrating the seriousness of the matter. The PAC

is extremely careful about its use of language—it does not go for hyperbole. but for understatement—and we compared the language that we used on this occasion with that which we have used previously. We called the affair
one of the gravest cases of the misuse of public resources to come before us for many years.
We called it
a shocking misappropriation of public and private money.
We said:
Mr. De Lorean's automobile companies received about £77 million of United Kingdom taxpayers' money and lost most of it within four years.
The Committee concluded:
There was misplaced optimism by Government and its advisers when the original investment decision was taken and when additional investments were made. and there was ineffective supervision of the project as it proceeded.
Our final comment in this part of the report was that hardly any of those who dealt with Mr. De Lorean
on behalf of the British taxpayer at a high level can escape substantial blame or criticism for their failure to prevent a major waste of public money.
We started by considering the details provided by the Comptroller and Auditor-General for Northern Ireland, and we identified the following issues for examination and exploration: first, the adequacy of the Department of Commerce's assessment of the potential viability of the project; secondly, the rather complicated structure of the De Lorean Motor Company, which was the American offshoot, and De Lorean Motor Cars Ltd., which was the Northern Ireland company, and the large contribution of public funds; and, thirdly, the provision of the master agreement—a legal document relating to the safeguarding of public funds.
We then considered the actions of the Department of Commerce and the Northern Ireland Development Agency during the project. The main issues which arose were the agreement with GPD Services Inc—the Swiss company—for the technical development of the car; the monitoring of the project by the Northern Ireland Development Agency, including the role of the nominee directors, about which I shall have more to say; De Lorean Motor Car Ltd's interest-free loans to the American De Lorean Motor Company; the lack of security for those loans and the method by which they were repaid; the justification for the sharp increase in employment during 1981 at a late stage in the life of the project; and, finally, the lessons that must be learnt from the failure of the project.
We had to ask: how practicable was the scheme from the beginning? Should it have been assisted? We know of the enormous problems in Northern Ireland, and we know of the special difficulties that existed with jobs available in east Belfast but none in west Belfast. The scheme would have produced 2,000 jobs in west Belfast, which would have been of enormous benefit to the country and to the people of Northern Ireland.
Then we had to consider the assessment by the Department of Commerce and how adequate and effective its negotiations were. We had to consider whether there was a sufficiently experienced team to deal with such a complex proposal. The Committee considered the importance of monitoring, because, in all its activities, it places great emphasis on the way in which monitoring is carried out. That is the only control we have. We consider several matters when we investigate a project, and the advice which we give from the start is that the Government Department concerned should be clear about what it wants


to do. Also from the start—not at a later stage—we want the Department to set in train a scheme for monitoring the developing project. Finally, we want the Department to be in a position unequivocally to compare outturn with expectation.
The importance of monitoring is obvious: it gives us an understanding not only of what has happened, but of what is happening at the time. Therefore, if matters are not going according to plan, modifications can be introduced. That might strike hon. Members as being obvious and reasonable, but, unfortunately, we investigate many companies where that was not done. Usually, the monitoring is carried out after the programme has been fulfilled. We must always repeat the necessity for monitoring at the beginning of an operation.
Then the Committee considered the extremely tight timetable. Was it accepted unwisely? Should the business have been conducted differently? In this respect, we must consider the circumstances in which the decision was made. The first meeting between the Department of Commerce and De Lorean was on 12 June in New York. At that meeting he put forward a scheme for engaging 2,000 people to work in west Belfast. Between 19 and 21 June, John De Lorean visited Belfast. The heads of agreement were signed on 21 June. On 29 June a joint team from the Department of Commerce and the Northern Ireland Development Agency visited the United States.
Our criticism is that the joint team consulted no American banks, financial institutions or automobile companies. Indeed, at no time did the joint team approach any American bank or financial analyst for a report. Of course, it was said that De Lorean had received offers from Detroit, Puerto Rico and the Republic of Ireland. De Lorean required the Department of Commerce to reach a decision within the short period of 16 days. No one else was subject to such pressure; indeed, Puerto Rico had been considering the matter for a year.
On 7 July a report was commissioned from McKinsey. It is a pity that that was not done earlier. Its points are set out in paragraph 18 of our report. The four main business risks that McKinsey identified were: first, that the ambitious sales and marketing share projections might prove unattainable; secondly, that the technical difficulties of developing a new plastic body might not be resolved in time, resulting in a sharp increase in capital expenditure requirements; thirdly, that the timetable for moving from development to production had no margin for slippage, because the financial and operating projections assumed that the operation would be outstandingly efficient from its inception; and, fourthly, that the project depended largely on one man—John De Lorean—and that its viability would be in doubt should anything happen to him.
McKinsey concluded that the Department of Commerce was being asked to fund
an extraordinarily risky venture
and that
the chances of the project succeeding as planned are remote".
It concluded that "common prudence" suggested that decisions should be based on a number of less optimistic assumptions than those put forward by the company. The Department of Commerce subsequently invited De Lorean Motor Company to comment on the risks and judged that DMC answered very effectively the McKinsey reservations as to the viability of the project.
That was not the view of the Public Accounts Committee. In paragraph 48, we state:

DOC considered that 7 July 1978 was the earliest practicable date to commission McKinsey.
As negotiations had started nearly a month earlier, as early as 8 June, we were not convinced by that argument and would have expected that crucial assessment to be called for before the heads of agreement were signed. We were very impressed with the assessment that McKinsey made in so short a time. Moreover, we considered that the Department of Commerce and the Northern Ireland Development Agency team gave insufficient weight to McKinsey's conclusions. We were extremely concerned that the Department of Commerce so readily accepted De Lorean's predictably optimistic response to McKinsey's strongly stated reservations which, in the event, unfortunately turned out to be so accurate.
Besides the late commissioning of McKinsey, there was an inadequate check of what was happening in Puerto Rico and in the Republic of Ireland. The team was told that it was the company that had broken off the negotiations, but, in fact, as we know, it was the Republic of Ireland that pulled out. There was a feeling that many others were being attracted to the project and that there was a race as to who would get in first, when no such race existed. Perhaps the most astonishing reply that we received on this aspect of the inquiry, mentioned in paragraph 45, was when we asked what further checks, if any, were made on Mr. De Lorean's creditworthiness or business standing prior to the completion of the master agreement. The reply received was to the effect that the agreement was between the De Lorean companies and the Department of Commerce and the Northern Ireland Development Agency, not Mr. De Lorean personally. It said:
There was no need to investigate his creditworthiness since no reliance was placed on him to input capital from his own resources".
There was no independent engineering assessment of the state of development of the car. In practice, the Government thought that they were buying the car, when they were purchasing the concept. Much of the design had to be undertaken subsequently, in ways that I shall describe. Finally, I repeat that the risks outlined by McKinsey were given insufficient weight, when they should have served as a warning.
I refer now to the structure of the De Lorean companies and the very high level of contribution from public funds. The point that we make strongly in our report is that the Department did not seek an adequate contribution of real risk capital from Mr. De Lorean, but left the control of the companies in his hands. As a result, De Lorean had control with little risk, and that was not a foundation on which the project was likely to prosper. That was the conclusion that we reached.
I should like to refer next to the provisions of the master agreement in relation to the safeguarding of public funds. I am concerned with the ambiguity in the master agreement, which was signed in July 1978. It was a legal document, but not as tightly drawn as it should have been. It enabled Mr. De Lorean to behave as if there were only one company, of which he was the sole proprietor. When one bears in mind the investment that he put in and the enormous investment that the British taxpayer put in, one realises that that was wrong. Several opportunities subsequently presented themselves to the Government to alter the master agreement to establish more effective safeguards, but unfortunately those opportunities were not taken.
One important aspect is the agreement with GPD Services for the technical development of the car. GPD was a Swiss-based company registered in Panama. I suppose that if that had been more widely known there would have been a greater alert as to what was going on. Because of the whole way in which the agreement was operating, tight monitoring and control was crucial. We say in paragraph 89:
NIDA and its nominee directors gave Mr. De Lorean too much freedom to manipulate the companies to his own ends.
As an example, on 28 July 1980 there was an entire reconstitution of the board of De Lorean Motor Company, with new directors, including his wife, on the board. The nominee directors were not consulted about what was changing in an important part of De Lorean. The presence of nominee directors, inexperienced in the automobile industry, was not sufficient to ensure that the public funds committed were adequately protected and prudently applied.
The agreement with GPD came about because for some 20 years Colin Chapman had had an arrangement with Mr. and Mrs. Juhan, who were importers and distributors for Lotus in Switzerland. Mr. Chapman was a former chairman of Lotus. A contract was made between De Lorean and GPD Services for $17·3 million to carry out the engineering work. In fact, the contract stipulated that $17·3 million was to be paid in advance as a lump sum. Why was it to be paid in advance? We deal with the matter in paragraph 60 of our report. We say:
The intention to contract with a Swiss company, about which nothing was known, and to pay what was envisaged to be the total cost of the work in advance ought to have been regarded by NIDA as being so unusual as to require close scrutiny.
Unfortunately, that scrutiny was not given. The agreement of the nominee directors should have been withheld.
I now come to the slightly complicated matter of the financing arrangements. I shall not spend too long on it. Those who wish to go into it further will find it all in the report. However, it would be wrong if I did not deal with it at least in moderate depth. A particularly unusual transaction occurred in May 1979 when, after the agreement, Lotus repaid GPD the $4 million that had been paid to it in November 1978 as a good faith deposit. That $4 million formed part of the funds that were misappropriated from GPD.
We were told that when De Lorean Motor Cars Ltd. commenced making payments to GPD in 1979 there was no reason why the nominee directors or NIDA should have been concerned at that development as it was embodied in the GPD contract, which provided for the payment to GPD of certain costs in addition to the advance payment. However, I must quote Sir Kenneth Cork, who was the liquidator. He took the view:
if you paid someone US $17·65 million to procure the development of a car, you would not expect to pay any more until approximately US $17·5 million had run out; that is why I was astonished.
We echo that astonishment and regard it as an extremely serious lapse by the nominee directors and the Northern Ireland Development Agency that they did not challenge the payments.
Between April 1979 and December 1981, almost £11·5 million was paid by De Lorean Motor Cars Ltd. to GPD Motors in respect of the technical development of the car, over and above the advance payments totalling $17·65

million. We thought the level of control to be utterly inadequate. Over $17 million was misappropriated without detection by those with responsibility for monitoring the scheme.

Mr. Nicholas Winterton: In view of his serious allegations about the abuse of public funds, can the right hon. Gentleman tell the House how many of those involved have been removed from their positions as a result of grotesque incompetence?

Mr. Sheldon: The Public Accounts Committee is not responsible for going into such matters. That is one of the reasons why the Committee wanted a debate on the Floor of the House. Problems are involved which are not for the Committee to resolve. Our task was to ensure, to the best of our ability, that the House was informed about taxpayers' money which had not been properly applied, and that any lessons to be learnt were given to the House. Other matters are for those with other responsibilities.
I have had to go into the finances of the case in detail because it is necessary to explain how the money went adrift, or, as Sir Kenneth Cork said, "went walkabout". Contrary to the original intention, both the American parent company and the development of the car were largely financed by the taxpayer, and over $17 million was misappropriated without detection by those engaged in monitoring the project. Not one penny of that S 17 million paid to GPD was used for the development of the car.
I shall now deal with the interest-free loans by the Northern Ireland subsidiary company, De Lorean Motor Cars Ltd., to the American parent, the De Lorean Motor Company. We thought it wrong for the Northern Ireland Development Agency to permit De Lorean Motor Cars Ltd. to make any loans to the American company. There was no need for that. In the event, the United States company received £6·5 million in loans from the Northern Ireland company. The use of taxpayers' money to fund the activities of an American company over which the Northern Ireland Development Agency had no control was unacceptable. The agency was clearly wrong. The loans were made without any form of agreement. There was no security, no terms for repayment and the loans were interest-free. That was a wrong decision, and we draw attention to it in the report.
When Mr. De Lorean went to Northern Ireland in early August 1980, he insisted upon a top-level meeting with the Government about the company's request for more funds, totalling £14·9 million. That arose mainly from cost overruns, which had been with the Government since January 1980. The application had received the support of the Northern Ireland Development Agency at a board meeting on 28 May. The agency thought that £14·9 million would not be enough and suggested that a larger sum should be considered. McKinsey had predicted a need for between £14 million and £21 million.
Paragraph 28 of our report states:
At a meeting on 5 August between Mr. Humphrey Atkins (by then the Secretary of State) and Mr. De Lorean, the latter indicated that the company required £20 million of extra funds, of which he expected to raise £6 million himself. The Government agreed to a loan of £14 million.
That was followed during 1981 by a large increase in the number of employees at the Northern Ireland factory. The target had been a maximum of 2,000 employees. In April 1981 a further 1,000 employees were recruited, and by


January 1982 2,600 workers were employed in the factory. That large increase in employment caused a number of problems in connection with running the factory.
A second shift was introduced, but the company's training centre was unable to handle the high intake. Untrained labour had to be put straight on to the production line, and the quality and productivity deteriorated. The cash flow was put under additional strain. The extra production was not matched by sales, and by the end of January, of the 8,000 cars produced, only just over 3,000 had been sold. That left high stock levels for dealers and the company. A wrong decision was taken which owed much more to Mr. De Lorean's desire to attract new funds from investors in the United States than to any realistic assumption about sales projections for the car.
What lessons can we learn from all this? The most important lesson is about how the Government operate in high-risk enterprises. As in this case, the situation is sometimes so bad that the problems are not regarded in quite the same way as they might be in relation to other forms of investment. How should the Government operate in high-risk areas, given the need to consider them and not to turn them aside?
First, the Government must match the experience and the negotiating skills of the people with whom they deal. Resulting agreements must be unambiguous to prevent the problems which inevitably arise when one is dealing with circumstances which are not normal for such investments. Secondly, the Government must insist on adequate time in which to carry out a full and detailed assessment of a potential project's viability.
In the private sector an individual might come to conclusions based upon a hunch, a guess or an informed understanding and he is, therefore, able to act more quickly than as a Government Department. Unfortunately, the Government cannot do that. The Government must account for their actions to the taxpayer. The Government must be given adequate time. If that is not open to them, reluctant though they might be, they must waive a decision. The quality of management must be thoroughly assessed by the Government.

Mr. J. D. Concannon: My right hon. Friend must understand what was happening in Northern Ireland in 1975–76. Today we are talking about one of the failures, but Northern Ireland has had many successes which would not have been successful under the conditions that he describes, because they would not have got past first base.

Mr. Sheldon: I shall be dealing with the specific problems in Northern Ireland. It is clear that the Government must take certain risks. I am explaining how such risks should be taken without putting too much of a brake on the work which is so necessary in Northern Ireland and elsewhere.
The quality of management must be thoroughly assessed by the Government, particularly when one man appears to be essential to the success of a project. Much greater investigation and control are needed. Where a new company is involved, the personal qualities and reputation of the person concerned need to be investigated most thoroughly. With a new industrial project, there must also always be a significant contribution of risk capital from the industrial side. The company must have a considerable stake in the project. It is no use relying on the expertise

and understanding of the person concerned if he does not have a substantial element at risk himself. When contemplating any high-risk investment, the Government must consider the worst case. They must consider what will happen if things go wrong, how far things could go wrong, and the limits of the Government's risk. It is also important that the detailed monitoring arrangements should be agreed in advance. They must be set up when the decision is made, so that there is no uncertainty about how the monitoring is to be carried out.
It is also essential that the role of nominee directors should be clarified throughout the whole Government machine. A number of nominee directors are uncertain of their role. The Public Accounts Committee has examined the problem. The Committee may take further evidence, and it will certainly submit a report on the role of nominee directors. It is assumed that they constitute a proper method of control, but both on the Government side and in the business world there are wide variations in the operation of nominee directors and in the interpretation of their role. Assumptions made about the effectiveness of control by nominee directors may not be valid, or may have only partial validity.
Finally, phased investment, wherever possible, is the best practice. Again, there must be tight monitoring so that, when so much money has been spent, the exact position is known. The passage of money and the progress of the scheme must be seen to go hand in hand and to be related one to the other.
The Committee had a memorandum from the Department of Finance and Personnel. The memorandum and the subsequent correspondence show that the Northern Ireland Departments have accepted the Committee's criticisms of the handling of the project and have agreed with the Committee on the lessons to be learnt. The Committee has also been assured that the lessons will be properly applied. The Committee needs an assurance from the Government that the lessons will also be applied throughout the United Kingdom by all other Government-funded bodies with responsibility for industrial development investment.
What progress is being made by the investigation into the affairs of the De Lorean companies by the receivers and the Royal Ulster Constabulary? Is every effort being made to recover the maximum amount of the public funds invested in the project? I hope that the Minister can tell us how much of the money invested has been recovered by the Government to date.
My right hon. Friend the Member for Mansfield (Mr. Concannon) spoke about operations in Northern Ireland and the general aspects of industrial development there. I acknowledge the difficulties faced, at present and in the past, by those who have the great responsibility of attracting mobile investment into Northern Ireland. They operate in a highly competitive market. They have to cope with the pressure of the highest level of unemployment in the United Kingdom. They have to overcome the often distorted image of Northern Ireland shown to the world by the media before showing the many positive attractions that it has to offer. One of the most important of those attractions is the plentiful supply of skilled, flexible and dedicated labour. The Committee stated in the report:
We would wish in this context to emphasise that in our view no blame for the failure of the De Lorean project rests with the workforce—on the contrary they emerge with great credit.
The Committee was very impressed by the work force.
When assessing the viability of a proposed enterprise in which public funds are to be invested, a delicate balance has to be struck between risk and reward. Both at the initial decision-making stage and later in the monitoring of the project one has to follow a difficult path between an over-careful concern with detailed control and over-reliance on the management's capabilities. The Committee concluded:
it is our view that, in the De Lorean case, they were struck at the wrong place at each stage.
The evidence of Sir Kenneth Cork carried great weight with the Committee. He said that a smaller scheme might have been viable. One might ask whether De Lorean would have accepted a smaller scheme. That is another matter. The lessons here for every Government Department to learn are apposite and should be well heeded.

The Minister of State, Northern Ireland Office (Dr. Rhodes Boyson): I agree entirely with the right hon. Member for Ashton-under-Lyne (Mr. Sheldon) that the report is most important. I am sure that the whole House will wish to join me in thanking the Public Accounts Committee for its painstaking examination of the very difficult and complex issues involved.
I think it would be useful if I made the Government's position perfectly clear right at the outset. This position has, of course, been affected and guided by a careful study of the Public Accounts Committee report itself. I shall be as brief as possible as I know that many right hon. and hon. Members on both sides of the House wish to take part in the debate.
I have no doubt that the only basis for successful industrial development in Northern Ireland or anywhere else is through soundly based enterprises, with the private sector playing its proper role in taking risks and generating profits, and with every project that comes forward for Government assistance being scrupulously researched and assessed and meticulously monitored.
Let me recall that at the time when this project was conceived the Government of the day, like the present Administration, were concerned about the very high level of unemployment in the Province. This was—and still is—particularly severe in west Belfast, where unemployment was then running at five times the average in greater Belfast which itself was well ahead of the Great Britain average. As we all know, these are the conditions in which terrorism can easily recruit on every street. Given the complex mixture of security, economic and social problems in Northern Ireland, there has been a natural desire for all Governments to explore every possible means of employment. All the conventional approaches to industrial development had been tried and failed in west Belfast. The normal industrial development project is spawned by an established company resting securely on a number of proven products, with substantial assets and financial backing. Such projects had shied away from Northern Ireland at that time.
By 1977 the flow of inward investment to Northern Ireland had virtually dried up. Between 1970 and 1977 only one American company decided to invest in the Province. A state enterprise—Strathearn Audio—had been attempted and had foundered. It was against that

background that the Government negotiated with De Lorean, hoping to bring together an experienced and successful engineer and business man, with a good team and a seemingly viable idea, and with Government providing most of the capital.
The De Lorean project, with the prospect of more than 2,000 jobs, was very attractive. As the right hon. Gentleman has said, Northern Ireland was only one of several areas competing for the investment. As a deal with Puerto Rico had virtually been completed—indeed, compensation had to be paid afterwards because the deal was not carried through—the negotiating pressure was intense, especially as regards the time scale. About £40 million of American federal money was on offer if the project went to Puerto Rico, while Detroit itself was putting up money for the De Lorean project, believing that if the car went elsewhere the long-term viability of the Detroit industry could be affected.
The right hon. Gentleman has drawn attention to the speed with which the deal was arranged. He has referred to the lack of contact with American banks. However, the McKinsey report was available, and Mr. De Lorean's reputation at that time, both in America and around the world, had to be borne in mind. In his recent autobiography, the head of Chrysler said that De Lorean was a first-rate auto man and a super engineer for Pontiac. Such was the reputation of the person involved.
There was also the report written for Puerto Rico by the reputable auditors Kearney, which says:
Kearney feels that DMC's marketing, production and organisation plans are sound. Assuming that significant delays or reversals are not encountered, Kearney feel that DMC should achieve its initial sales and production objectives.
Similarly, a report done for De Lorean by Booz, Allen and Hamilton stated:
Entry into this market with its high capital investment and entrenched competition obviously involves considerable risk. Nonetheless, we believe that your product, your people and your business concept in combination should prove the necessary elements for success.
Those reports were available to the Department at that time.

Mr. Nicholas Winterton: It is strange that my hon. Friend should be seeking to make excuses for the lack of adequate inquiries about the pedigree and career of Mr. De Lorean, because anybody in the motor industry, not least General Motors, could have told the Department that De Lorean had been dismissed from General Motors. If the Department had asked the editor of the Detroit News, which has much to do with the motor industry, it would have found out that he had an extremely seamy past. Can my hon. Friend assure me that the Government will in no way grant money to any business man in this country on the basis that they granted it to De Lorean?

Dr. Boyson: My hon. Friend's latter point is the easiest one to answer. One thing that has changed, and one of the lessons that have been learnt, is that money will not be put by the Government into projects in Northern Ireland unless private money is also put up. It is no longer a question of somebody coming along with an idea and the Government providing the money. In all the schemes going through now, there must be at least £1 of private money to any £1 of help from the Government.
I realise that my hon. Friend the Member for Macclesfield (Mr. Winterton) has had a deep and intense interest in this matter for a long time. I quoted the head


of Chrysler, which, with all due respect to my hon. Friend, is a well-known company. Only three months ago, when he left that company, I read a great deal about the reputation of Mr. De Lorean. If my hon. Friend knew that at the time, he should have drawn it to the attention of the Northern Ireland Office. Similarly, if he knows of anyone who the Government are funding at present in Northern Ireland who is likely to come to a sticky end, we should be grateful for that information.

Mr. Concannon: I cannot understand how the myth has arisen that no one went into Mr. De Lorean's background with General Motors. I spent some considerable time examining his background, certainly with General Motors. The hon. Member for Macclesfield (Mr. Winterton) says that Mr. De Lorean was sacked from that company, but I can only quote what a representative of General Motors told me when I asked him whether De Lorean could do the job. He said, "Yes. If that is the product you want, he is the only person in the world who can do it. He has a proven background, and if he came back to General Motors tomorrow we would put him on such a project." That is the sort of reaction I got from General Motors, from Chrysler in Pittsburgh, and from almost everyone I asked at the time.

Dr. Boyson: I welcome the intervention of the right hon. Member for Mansfield (Mr. Concannon), who occupied the office that I now hold during what was obviously a difficult time. They are always difficult times in Northern Ireland. In fairness, I should say that the pressure was not all one way. It was made clear to Mr. De Lorean that assistance would be available only if the project was located in west Belfast. He did not have carte blanche to set up anywhere in Northern Ireland.
Having made the decision to compete for the project, efforts were then made to get the best assessment available in the time available, bearing in mind the fact that several places—Detroit, Puerto Rico and the Republic of Ireland—had shown their confidence in the project by making firm offers for it. When it came to the decision to assist De Lorean, a balance sheet of positive and negative factors was drawn up by Ministers in Northern Ireland. In the light of that assessment, the Government concluded that the balance of risk lay in favour of the project. I know from first-hand experience how heavily the responsibility for conditions in Northern Ireland weighs with Ministers, and I can understand the good intentions behind this experiment in policy.
When the Government took office in 1979, loans and share capital amounting to £52·8 million had already been offered and accepted. Of this, about £13·48 million had been paid to the company. The Government believed that unilateral termination of the agreement at that stage would have resulted in a cost to public funds in excess of the amount estimated to carry the project to completion. In 1980, the Government, after taking legal advice on the terms of the 1978 agreement, concluded that further assistance of £14 million should be made available to the company in addition to the £52·8 million already offered.
It is worth remembering that in 1981 the Government considered that there was a prospect that the project might be successfully established, albeit at a greater cost to public funds than was provided for in the original agreement. As late as November 1981, McKinsey—during the two years that company presented about 10

reports to the Government—which had been closely involved in the monitoring of the company, forwarded a report to the Northern Ireland Development Agency under cover of a letter which contained the following passage:
You may detect in the report a rather more optimistic tone than has been characteristic of our previous reports. I think this is justified. The feed-back that we received from our dealer survey, my impressions gained from discussions with two area managers at the New Jersey Quality Assurance Centre all suggest that there is at least a good possibility that by the end of the year DMC will be reporting consolidated profits perhaps of the order of 30 million on 350–400 million dollars of sales. In other words the very considerable risk taken by HMG in agreeing to back the project in the first place might be seen to be paying off.
The road to hell is paved with good intentions, and the fact is that the project failed. When that happens, it is essential to extract every lesson that we can from the experience, and the House will be grateful for the lessons which the PAC listed in its report. This is not an academic exercise. Its object is to incorporate the lessons into current operating procedures and practice. In this respect, we owe a great debt to the PAC for the detailed work that it carried out.
I should record that the Public Accounts Committee's report presents a comprehensive analysis of the potential pitfalls in attracting and developing new industrial projects. It will help to shape the thinking of everyone who is involved in this area. For my part, I can assure the House that all of the major recommendations in the report have been accepted and incorporated into the procedures for handling industrial development in Northern Ireland.
As the Department of Finance and Personnel's memorandum of response of 24 October 1984 and the supplementary memorandum of 8 January 1985 make clear, Government policy has been changed. A project such as De Lorean would not now be supported. Industrial support is made available only for projects in which a substantial part of the financial resources is provided by the private sector. [Interruption.] The Industrial Development Board's operating arrangements and investment criteria are now devised in the light of the experience gained in the De Lorean case and are fully compatible with the recommendations in paragraphs 91 to 97 of the Committee's report.
I should say in response to a comment that I heard from the Opposition Benches about unemployment in Northern Ireland—no doubt made with the best of intentions—that we have not stopped investing money in what we believe are viable projects. If we consider what we are spending now to help industry in Northern Ireland—I trust that we are spending it sensibly, as did most previous Governments—I do not believe that the Government have anything to be ashamed of.

Mr. Concannon: I simply wished to draw attention to unemployment in Northern Ireland. Some of my colleagues have high unemployment in their constituencies, but it is as nothing compared with Northern Ireland. If the Government want to do something about it, they must take risks commensurate with the problem. With the addition of the security problems in Northern Ireland, that is the context in which we should place this debate.

Dr. Boyson: I appreciate the points made by the right hon. Member for Mansfield. I have a weakness in the House sometimes in that, as an ex-teacher, I always hear what is being said at the back of the class. Therefore, I issue an apology not only to the right hon. Member for


Mansfield but to my hon. Friends and to other Opposition Members. I shall, after 11 years, try to disabuse myself of that habit.
The IDB's operating arrangements and investment criteria are now devised in the light of experience in the De Lorean case, and are fully compatible with those recommended in paragraphs 91 to 97 which, with regard to future policy, are the kernel of the report. In particular, they ensure, first, that the IDB has access to a range of skills appropriate to each project and to technical advice, and takes whatever time is required fully to assess project viability, including consideration of the worst case scenario. This week I have been looking into the sort of technical advice that we have been using on projects and the Mason that projects have been accepted or rejected on that technical advice.
Secondly, management quality is examined as part of the assessment process and, where a new company is involved, the personal qualities and reputation of the entrepreneur are exhaustively investigated. Thirdly, the parties' responsibilities are clearly defined in financial assistance agreements. Objectives and standards of performance and, where appropriate, detailed monitoring arrangements are agreed in advance.
Fourthly, where possible, agreements are based upon the principle of phased investment with a maximum upfront commitment from the private investors, and care is taken to ensure that there is an adequate reserve of private funds available should the project run into difficulties. Lastly, careful consideration is given to the company structure. The aim is to secure a legal commitment from the company which has overall or ultimate responsibility in the performance of obligation.
Moreover, in line with the Committee's recommendations in its report, the position of nominee directors has been reassessed and detailed formal advice on their role and responsibilities has been given. A document on the role and responsibilities of nominee directors was prepared by the Industrial Development Board, in April last year, I believe, and a copy has been made available to the Committee. The role of nominee directors is a difficult one, and we believe that in preparing this document we shall assist in future policy.

Mr. George Park: When a person becomes a nominee director, does the Minister's communication deal with the aspect that that person then owes his first loyalty to the company, not reporting to Government?

Dr. Boyson: I know that the hon. Gentleman is an expert on the automobile industry. He has put his finger on the central question whether, when a person is put on a board, his first responsibility is to the company which has appointed him. Who pays for that? About £5,000 was paid in this case to the nominee directors or to those who put them on the board.
I have been considering this week what can be done. From discussions, it would seem that if a nominee director who is put on a company board to watch the interests—and that is what is done by the IDB in Northern Ireland—finds that there is some information which he cannot bring back which in his view will prevent him from doing his job properly and may put at risk the future of IDB investment in the company, he has to resign. This question

will have to be discussed more widely. It is a difficult matter, and the hon. Gentleman was right to put his finger upon what could be a major weakness. If such a nominee director cannot bring back information and do the job for which the IDB appointed him, he should resign because he cannot do the job that he was appointed to do.
The Supplementary Memorandum of Response of the Northern Ireland Department to the Public Accounts Committee lists the 13 principles which the Northern Ireland Department will now follow in assessing and supporting new industrial projects. Lord Bruce-Gardyne, a Member of the other place and a former Member of this House, who has always surveyed the De Lorean project with at least a highly sceptical eye, stated:
I was highly impressed, in particular, by the 13 specific steps to which the Northern Ireland Department is committing itself and its officials in the light of another plausible adventurer happening to appear before them."—[Official Report, House of Lords, 27 February 1985; Vol. 460, c. 993.]
As for the De Lorean case itself, the Government share the Committee's serious concern about the loss of public funds and are determined to take all available steps to recover as much of the loss as possible. I am sure that the House will be aware that there are certain aspects of the case which I should not discuss because of factors affecting legal actions relating to the De Lorean case. The Government and the receivers, however, have initiated legal action in the United States and in Switzerland. The United States Trustee in Bankruptcy has legal actions in hand on behalf of creditors, of whom Her Majesty's Government are the largest, against a number of parties, including De Lorean.
It has been asked how much money we have reclaimed. A total of £6 million has already come back and, with regard to the site at Dunmurry, the sum of £1·8 million. The Government will leave no stone unturned to get back in every way possible the money that went adrift or that went "walkabout," as was mentioned earlier by the Chairman of the PAC.

Mr. Nicholas Winterton: My hon. Friend has talked about the various sources from which the Government hope to recoup some of the taxpayers' dramatic losses. He has not mentioned the action that the Government were taking against Arthur Andersen. Can he update the House on what the Government are doing in respect of the accountants Arthur Andersen in New York?

Dr. Boyson: I am grateful to my hon. Friend for asking that question. I have a side-note prepared because I thought that some hon. Gentleman might ask the question. It was not a plant. I assure the House, given the strong feelings of my hon. Friend the Member for Macclesfield on the De Lorean case, that he and I are not hand in glove. I assure my hon. Friend that Government action in the case to which he has referred will be vigorously pursued.
Out of fairness to Northern Ireland—and this was said by the Chairman of the PAC—I must put on record the fact that the tragedy of the failure of the De Lorean project was not the fault of the workers of the company or of the people of Northern Ireland. The factory was built, the work force trained and the product brought to market within two and a half years. The Public Accounts Committee acknowledged this at the beginning of its report.
The Public Accounts Committee also commented that it would not want


the De Lorean experience to lead to the Industrial Development Board becoming an over-cautious bureaucratic organisation in danger of rejecting opportunities for fear of criticism".
There has to be a balance between careful assessment of a project and joint risk-taking on one side and careful control of public money on the other. That is a difficult decision for Ministers, and even more difficult in Northern Ireland.
I regard it as vital that, if we are to assess properly the lessons of this case and the Public Accounts Committee report, we must not confine ourselves to the easy line of criticism simply by being wise after the event, but we should try to understand the circumstances of the time and put ourselves in the position of those who made the decision and monitored the project. I am pleased to say that the Committee's report has emphasised this point.
It is said that those who ignore the lessons of history have to live them again. I trust that, with the help of the PAC report, that does not happen in this case. I shall be interested to hear the views of right hon. and hon. Members on this case and on the Public Accounts Committee report.

5 pm

Mr. Roy Mason: I, too, wish at the outset to welcome the PAC report. It is well known in the House that I am not a lover of Select Committees or of the Select Committee system. However, the PAC is a time-honoured and respected body of the House, and over the years Governments have usually appreciated its work, responded as helpfully as Government policy would allow, and invariably taken on board many of the Committee's recommedations.
That was not wholly true on this occasion. Only after the PAC had objected to a poor and inadequate response from the Government did it get a few more positive acceptances of its recommendations. There was a poor response because the Government were embarrassed. The cash had been lost or had gone walkabout. That had happened in their time, not in Labour's time. As a result of the PAC report, new operational guidelines have been issued to those Departments and senior civil servants working within the Government's policy.
The Government's policies have changed. They now have a less interventionist policy. Their overall policy is less caring about the social distress and severe enconomic problems of areas and regions of the nation. Unemployment has risen dramatically. Ministers and senior civil servants have been frightened off taking initiatives and using Government intervention techniques to encourage industry, especially in those parts of the country to which, for a variety of reasons, private enterprise will not go.
Stilted, frustrated, shackled expertise has been the order of the day in Departments concerned with industry, commerce and in the development boards. Their enterprise and spirit has been dulled. They are no longer interested in searching for jobs, and their political masters have adopted the same attitude. There is no political will in the Government to fight the disease of unemployment.
That is the Achilles' heel of the Government, and it will be their downfall. Hence the fifth columnists in their ranks who are determined to undermine and ruin their noninterventionist strategy. All those forces, together with those of her Majesty's Opposition, will in due course succeed in their endeavours because there will be

Merseysides, Bogsides and west Belfasts—no-go areas by private enterprise—and if dereliction, misery, mass unhappiness and civil strife are to be avoided, Government intervention will be absolutely essential.
The decision to support the De Lorean project was taken not only in the knowledge of the risk of possible failure, also having regard to the great benefits which success could bring to an area beset by acute political, social, economic and security difficulties.
That statement appeared in Cmnd. 9374, the Government's response to the Committee. They added:
The policy has, however, changed, and investment of this nature would not now be supported under present Government policy.
The Government will eat those words before this Parliament is at an end. Indeed, they have already' had a few gobstoppers—decisions which must have stuck in their throat.
When the PAC used the words
the gravest misuse of public resources,
everybody appreciated that it was an exaggeration. Over the years Governments have done much worse than that. One need go back only to 1962, when it was estimated that the production cost of Concorde would be £75·85 million. By 1979 the cost had reached £795 million—for a project which has never been a commercial proposition.
What of Ravenscraig and the fight by the Secretary of State for Scotland to keep it alive? It is not profitable. It is kept going on social and employment grounds. On 26 January 1983 the Select Committee on Trade and Industry questioned the then BSC chairman, Mr. MacGregor:
Do you believe that likely present and future demand for steel from BSC could be met more efficiently by three or four integrated sites?
He answered:
Yes. Keeping five sites open, the cost is £100 million per year.
That was for social and employment reasons. De Lorean was £77 million over four years. Thus, it is not necessary for anybody to explain to right hon. and hon. Members who have lived through such decisions that De Lorean was one of the gravest misuses of public resources. Governments are periodically forced into situations in which social needs and job considerations outweigh strict economic calculations, and the emphasis in the PAC report should have been much more balanced in that respect.

Mr. Michael Latham: In relation to the expression
the gravest misuse of public resources,
does the right hon. Gentleman not realise that a considerable amount of money was swindled?

Mr. Mason: Of course I do, but I am talking about the time when the agreement was being established. At that time we had to take into account the social considerations as well as the economic argument about whether we could manage to get as tight a master agreement as that to which the Chairman of the PAC referred.
In that sense, let us consider the PAC report and its examination of the De Lorean motor car project. The numerical strength of the PAC was 15 Members of Parliament. The Committee had nine sittings, and the average attendance at the Committee was six. Apart from one sitting, the highest attendances were for the two mainly drafting sittings, and then there were only 11, some of whom had not been present to question most witnesses. So much for the seriousness that they—the majority—attached to the subject.
As for their experience, especially of ministerial office, there were two former Under-Secretaries and the Chairman who had served as a junior Minister at the Treasury. The Chairman was Financial Secretary to the Treasury from 1975 to 1979. That was a most crucial time, because, before the De Lorean deal could be finalised and agreed by Government, the Treasury had to be won over or, by decree of ministerial majority, accept the final decision of the Economic and Industry Committee.
The Treasury had some reservations—expressed by the then Chief Secretary, now Lord Barnett—not in direct opposition but expressing doubts as to whether the economics of the project were open to serious question. However, the clear view of the Committee was that the De Lorean deal should go ahead, and on 26 July 1978, after a meeting at which 19 Ministers were present, I was given my instructions on how to proceed. Not one Minister and not one Department, including the Treasury, objected to my proceeding.
In the light of the PAC report—which was printed on 16 July 1984, six years after the deal was agreed by the Government in 1978—we must consider the background in terms of the situation in Northern Ireland and west Belfast at that time. Unemployment in the United Kingdom averaged 5·7 per cent. In Northern Ireland it was 11 per cent. In west Belfast, male unemployment was between 35 and 40 per cent. Youth unemployment stood at 50 per cent. It is a shocking and disgraceful indictment of the present Government to note that, while unemployment in the United Kingdom now averages 13·5 per cent., in Northern Ireland it averages 21 per cent.
Early in 1978 the Labour Government decided on a special policy for Northern Ireland. While there were always problems with security and continuing talks on constitutional change, something more positive had to be done at that time to alleviate the social distress caused by such high rates of unemployment. It was not just the awful social and economic scene—the ever-growing dole queues and soul-destroying despair as the Department of Commerce and the Northern Ireland Development Agency searched for jobs—but the frightening terrorist picture. That picture was one of terrorists in their ghettos of relative safety, of no-go areas for inward investment and of recruitment centres for the Provisional IRA and the Irish National Liberation Army, with thousands of young people constantly drawn into the clutches of those terrorist groups.
If the Government showed that they cared, that they recognised the awful severity of the problem, and produced a policy which would tackle the social evils of mass unemployment, they might also win those young people away from terrorism. In other words, if they cut off the terrorists' raw material, their supply of recruits, hopefully, by our deeds, we would be known and recognised.
The Cabinet agreed to my scheme to tackle this enormous problem by furnishing a new set of financial aids designed to attract investment in the Province. Whereas, in the assisted areas of Great Britain, 23 per cent. of cash grants was given to new developments for the purchase of land, the building of new factories and so on, in Northern Ireland I was allowed 40 per ent. for the whole of the

Province and 50 per cent. cash grants in the areas of highest unemployment, such as west Belfast. That is why De Lorean went there.

Mr. Robert Sheldon: I have had an opportunity to check the Members' attendance at four of the five sittings of the Committee. It was nine, 10, 10 and 12, and, as my right hon. Friend rightly says, attendance at deliberations was greater than that. He will be aware that the Financial Secretary to the Treasury is a member of the Committee who does not attend. There was one member who was ill almost throughout the proceedings and there was another who was waiting to transfer out of the Committee.

Mr. Mason: I am sorry that my right hon. Friend has started nit-picking on the numbers. I would not want to bore the House by reading out all the attendances, although I have a list here. Apart from one decimal point, there is no difference between what I have said and what my right hon. Friend has said.
Armed with these new financial aids granted by the Government, my right hon. Friend the Member for Mansfield (Mr. Concannon) and I bent all our efforts to sell Northern Ireland as a location for investment and industrial expansion. My right hon. Friend the Member for Mansfield did a sterling job; everyone in the Province will vouch for that.
In 1978 and 1979, we attracted seven American companies to Northern Ireland with job prospects for 4,100 people. De Lorean was one of them.
The team of officials which negotiated the De Lorean project was responsible for the negotiation in 1978 and 1979 of 6 other new American Investments which are currently providing some 2,300 jobs (20% of all the existing jobs in US companies in Northern Ireland). Some of these companies have subsequently entered into expansion agreements.
That, too, is a quotation from the Government's reply to the PAC, in Cmnd. 9374. If, therefore, the PAC intended any reflection on them, that reply partly answers the criticism.
The negotiations on the De Lorean project were hectic but detailed. Contact had been made long before 20 June 1978 when the Northern Ireland Development Agency and the Departments of Commerce, Finance and Manpower Services examined the Booz, Allen and Hamilton consultancy report on the De Lorean project. That had been prepared months before for Puerto Rico and the Irish Republic. The collective view of those Departments on 20 June 1978 was that it was a high-risk project but that we should make a pitch for it.
On 22 June, therefore, we made contact with De Lorean. Departments were now stating their positions. The Industrial Development Advisory Committee said that it was a high risk but a potentially rewarding project. The Northern Ireland Development Agency found in favour of the project. The Northern Ireland Department of Finance was prepared to agree in principle.
Meanwhile, a lurid set of articles on Northern Ireland and the troubles there was appearing in the New York Times, upsetting our potential investors and potential American employers on our other American projects. Therefore, we decided to convince them face to face. My right hon. Friend the Member for Mansfield and officials made the trip. On 23 June, the Cabinet Office was informed of the De Lorean prospect. We asked it to inform our ambassador in Washington and to tip off Senator


Kennedy and Tip O'Neill on the possibility and also asked that our ambassador be briefed to discuss it with the Prime Minister on his planned visit to Washington.
On 27 June, I was again in touch with the Chief Secretary. I promised him that I would try for more private investment before the Northern Ireland Development Agency's financial safety net was used. NIDA had devised a package to cover the possible gap in private investment just in case Oppenheimer, on behalf of the United States investors, failed to come up with sufficient private cash.
On 3 July, the Department of Commerce and the NIDA team went to Detroit to discuss the details of the corporate plan, and there were three days of talks. Then De Lorean came to Northern Ireland with the Booz, Allen consultants, and we had more discussions.
On 4 July. the Treasury informed me that approval would be considered only after discussion of the whole package. Therefore, on 6 July full details were sent to the Chief Secretary, the Cabinet Office and all the members of the NI Committee—the Special Cabinet Sub-Committee on Northern Ireland Affairs.
At this stage it is important to note that in this timetable the De Lorean company had already done all the work for Puerto Rico and the Republic of Ireland. It was a matter of reviewing the variables peculiar to the Province of Northern Ireland. We called in McKinsey, the independent consultants, to design the project. Then, on 11 July, a further letter was sent to the Chief Secretary bringing him up to date on all the details of the project.
On 17 July, in Northern Ireland, all the Departments concerned gathered together and the pros and cons were weighed again. The Department still approved, but concluded that at the end of the day this was primarily a political decision. NIDA, now realising that other Ministers were involved, urged me to use my best endeavours to secure a quick and favourable decision from the Cabinet Committee.
Evaluation and decision-making had thus been hectic since examining the Booz, Allen consultants' report on the project on 20 June 1978. There had been weeks of decision-making. NIDA had been fully engaged. A team of NIDA and Department of Commerce officials discussed the project in depth in the United States. There was in-depth discussion with De Lorean and his team in Northern Ireland. Top consultancy advice had been obtained and did not warn us off. We were told that it was risky, but we were not stopped. We had expert legal advice from the United States on countervailing duties. The Washington embassy was involved. All the necessary Whitehall Departments were kept in the picture. There was not one ministerial objection.
Furthermore, from not a single source had there been the slightest suggestion that the De Lorean team was suspect either as it stood or on the track record of its members. Indeed, General Motors encouraged De Lorean to come to Northern Ireland and advised the Americans to assist the project.
Then, later, Oppenheimer reported——

Mr. Concannon: It is right to point out that one of the reasons for De Lorean was this spin-off. It is also true that General Motors became interested in Northern Ireland through this and, of course successfully followed De Lorean to Northern Ireland.

Mr. Mason: My right hon. Friend is, of course right, and he knows the details.

Mr. Park: Would my right hon. Friend accept from me that General Motors did not want De Lorean anywhere near its plant ever again?

Mr. Mason: That may be so in retrospect, but I am talking about that time. That is the point. At that time none was suspect—neither him nor any of his team—and that has not been proved either.
Oppenheimer reported that 19 documents and cheques had come in from 133 investors whom he had lined up. I was thus able to impart a bit of pleasing news to the Chief Secretary.
On 24 July a message came from the Prime Minister that the De Lorean project should now go to the Economic and Industry Committee before any further action was taken. Consequently, on 26 July the EIC met, with the then Secretary of State for Trade and Industry, Mr. Eric Varley, in the chair. There were 19 Ministers present—19 Departments had examined my paper and briefed their Ministers—and on that day, without one voice raised to stop my proceeding, I was given my instructions. I concluded the deal on 28 July and made the announcement on 3 August 1978.
The press reported one trade union official in Northern Ireland as saying that
the factory would do more to destroy the IRA than deploying the entire British Army.
Such was the feeling in the Province at that time.
That day the New York Times and Wall Street Journal carried definitive pronouncements that the De Lorean project was going to Puerto Rico—backing up De Lorean's view that he also had Puerto Rico in mind. Puerto Rico's business community was stunned at the news and threatened legal action against all of us, as my right hon. Friend the Member for Mansfield indicated earlier in an intervention. Thereafter, allaying the fears of the Chief Secretary, Oppenheimer's money started to come in: 120 investors each subscribed a minimum of $150,000 and later 206 dealers entered a sales agreement with De Lorean to purchase 26,350 cars over two years. Therefore. once the Puerto Rican proposition had gone, the Oppenheimer cash came into line.
I left office long before the factory was built. De Lorean received money from the then Government to which he was legally entitled. When I left the Province at the end of April 1979, only £17·7 million had been passed over to him. The vast bulk of the cash—apart from that which was promised and theoretically accepted—plus another two tranches of £14 million and £10 million in loans, were given to De Lorean by this Government. If the master agreement was weak, as suggested by the PAC, and the monitoring of the cash flow was not satisfactory, well, as the PAC said in paragraph 52:
It is a matter of great concern to us that, on each occasion when Mr. De Lorean was seeking additional funds, no attempt was made to amend the master agreement to establish effective safeguards.
Why then did not those Conservative Ministers get a grip on the situation? They had the opportunity to tighten financial control of the De Lorean enterprise, and also to slow down production in keeping with the market. I believe that De Lorean Motor Cars Ltd. could have been saved. The Conservative Administration were lax in their handling of the affair, and I am sorry for all those who lost their jobs and hope for a decent future as a result of that lackadaisical approach.
May I say to all the officials who were involved at that exacting and exciting time that it was worth doing; it was worth fighting for. They need have no sense of shame. They did a remarkably fine job and it cannot be taken away from them—or John De Lorean. I echo very firmly the PAC's view:
We wish to record that those involved have a number of positive achievements to their credit, many of which reflect well on Northern Ireland as a location for new industry. They built a modern automobile plant on a green field site, developed and produced a new car of acceptable quality with labour new to the industry and using new methods for mass producing fibre glass body shells. They employed 2,600 people at peak production, and established a distribution network throughout the United States, all in 2½ years.
By any standards, that was a major achievement.
Therefore, my right hon. Friend the Member for Mansfield and I regret that we had to leave before the factory was built and the product launched—and even before hardly any money was spent. But we are both of the opinion that, had we stayed on, with our keen interest in the project, allied with the political will to succeed, De Lorean motor cars would still be coming off that production line in west Belfast.

Mr. J. Enoch Powell: The Northern Ireland contribution to the debate ought properly to have been made by my right hon. Friend the Member for Lagan Valley (Mr. Molyneaux), since the De Lorean factory was at all material times situated in his constituency, first as the Member for Antrim, South and now as the Member for Lagan Valley. The fact that it is invariably referred to as being in west Belfast is not without its significance in a context to which I will come in a moment. However, there is no need for me to convey the apologies of my right hon. Friend, especially—as I said yesterday—during an election campaign, since the Government have generously expressed their regret that no Northern Ireland Member was consulted before this matter was put down for debate today.
In one sense the debate is a churning up of the past, and the Minister is entitled to quote from the memorandum the specific statements of the Government that such a project and such a policy as this would not at present be entertained and lie outside the principles and guidelines which are now followed in the Northern Ireland Administration. In that sense it could be argued that the lesson has been learnt, but I am sure that the right hon. Member for Ashton-under-Lyne (Mr. Sheldon), the Chairman of the Public Accounts Committee, would have been doing less than his duty if he had not obliged the House, upon this opportunity, to confront the misjudgment which occurred in 1978.
I apologise to the right hon. Member for Barnsley, Central (Mr. Mason), who has just made a remarkable political speech which revealed the sense of the speaker that he was on a defensive brief. It was well done, but those who read between the lines would come to the conclusion that there had in fact been a major error of judgment committed at the inception of the project.
What we have to account for is that Ministers, civil servants and Cabinets entertained a proposition which, upon the face of it, was positively hair-raising. They entered into an agreement which gave the authority and all

the money into the hands of someone who was committing nothing. They were confronted with a personality who, to the most ordinary psychologist, would have been recognisable as a manifest shark—something which has been amply borne out in the succeeding years.
Those of us who watched the events at the time could scarcely believe our ears when we heard the terms of the agreement and contemplated the individual and the boasts of the individual with whom the agreement had been made. So we still have something to learn from considering how it was that a misjudgment of that scale, with such disastrous consequences, was made.
The Public Accounts Committee is, in a sense, debarred by its terms of reference and procedure from placing its finger upon the essential cause of the disaster, for, in its own words,
the Committee do not seek to question the merits of Government policy objectives".
Unless Government policy objectives are questioned, and unless the analysis and the motives of the Government are questioned, we shall not be able to understand what happened. Certainly the memorandum was right in saying that it was essentially a political decision. Paragraph 3 of the memorandum says:
The Government decided as a matter of policy that the potential economic and social benefits justified taking the risks".
Or, perhaps more significantly, as the Public Accounts Committee quotes from McKinsey in paragraph 18:
the political and image benefits to be derived from the DMC project would have to be very substantial".
It was in the light of political and presentational or image considerations that Ministers and their advisers were prevailed upon to enter into an almost unimaginable contract which had foreseeable results.
I want to point to what, in my opinion, is the essential error in that political and presentational analysis. The word "image" in the sentence which I have just quoted is important, because what was done was done not only for results but for public consumption. It was done in the hope, no doubt, of its outcome. However, it was also done for show and to be shown off in certain directions.
The fundamental error is a wrong attribution of the relationship of cause and effect between violence and unemployment. This was highlighted by the right hon. Member for Barnsley, Central, who quoted a trade unionist who had said that an operation of this sort would help to "destroy the IRA." It is a total misunderstanding—a misunderstanding which is degrading in its character—to confuse terrorism with economic conditions, to suppose that nationalism and unemployment can be traded off one against the other, and from that to conclude that, somehow, one can buy out nationalism by offering economic advantages, or draw the teeth of the terrorists' pursuit of a political objective by investing in the areas from which they draw their strength.
It was that mistaken notion, that hysterical approach to Northern Ireland and its predicament, that created the frame of mind in which Ministers as sage and balanced as the right hon. Member for Barnsley, Central and the right hon. Member for Mansfield (Mr. Concannon) could, in good faith, make so grave a miscalculation as this. They have stressed the level of unemployment in Northern Ireland, but a high level of unemployment calls not for high risk but for more jobs. To state that unemployment is high in an area is not to justify the investment of money at greater risk than would have been judged wise in other


circumstances. Indeed, those are the very circumstances in which one ought to be especially sure that the investment will be realised in terms of jobs.
The level of unemployment is no justification for risk taking; but always it comes out in the phraseology that there was that other factor, the factor referred to by the usual periphrasis as "security"—the notion that if additional employment could be brought into west Belfast, that in itself would be a pacifying factor in the circumstances of Northern Ireland. In the end, we had neither. We had the consequences of a miscalculation in the temporary creation of about 2,000 jobs, the loss of those jobs and great dismay and discredit over a wide area; and we gained nothing in the direction in which it was hoped gains would be made.
I have stated what I believe to have been the root cause of this astonishing misjudgment. In order to complete that argument I would, strictly, need to replace the false picture with what I regard as the true analysis of the causes and nature of the situation in Northern Ireland. However, we are discussing in much more narrow terms the report of the Public Accounts Committee and the De Lorean fiasco. Therefore, I shall limit myself to saying that a political misjudgment was motivated less by consideration of the high level of unemployment than by consideration of the security situation, founded upon a profound and dangerous misconception of cause and effect in Northen Ireland.

Mr. Nicholas Winterton: I am very pleased to participate in this short debate. As has already been said, I have had a personal interest in the matter for some time.
May I congratulate, as other hon. Members have done, the right hon. Member for Ashton-under-Lyne (Mr. Sheldon) on the very competent way in which he presented his Committee's report and its conclusions. May I also congratulate his Committee upon its conclusions, many of which now appear to have been accepted by the Government, albeit at a late stage. I regret that the terms of reference of his Committee did not allow it to go further than it was able to go.
I endorse the sentiments and views expressed by the right hon. Member for South Down (Mr. Powell) about this affair, but I was somewhat surprised by the speech of the right hon. Member for Barnsley, Central (Mr. Mason). He seemed to be trying entirely to jutify the actions for which he and his Government were responsible. In doing so, he endeavoured to unload the entire blame upon the incoming Conservative Government of June 1979. If the right hon. Gentleman had investigated the career of Mr. De Lorean from his youth to his General Motors days, he would have discovered that he was responsible for so many crooked deals that it would not have taken him long to come to the conclusion that he should not be backed, had there not been, as was pointed out by the right hon. Member for South Down, very important political implications in the decision which his Government were taking, since it was envisaged at that time that there might be a general election in the autumn of 1978 and that the provision of jobs in west Belfast might be of political advantage to the right hon. Gentleman and his Government.

Mr. Mason: It is absolute nonsense to think that in the autumn of 1978 or in the spring of 1979 we were thinking

in terms of a general election. We had been working on the plan to attract investment to Northern Ireland for the previous 12 months. Furthermore, the hon. Member for Macclesfield (Mr. Winterton) was involved in the character assassination of John De Lorean well after the deal was made. Prior to the deal being made with John De Lorean there was no evidence whatsoever of any bad dealing by that man. He had been the vice-president of General Motors for 17 years.

Mr. Winterton: I can only say to the right hon. Gentleman that he should consult some of the motor manufacturers and others who are involved in the motor industry, not least the editor of the Detroit News. I am sure that that gentleman, and others, would give him the kind of evidence that I have briefly outlined. As many hon. Members will be aware, I cannot be totally objective about this matter.
As a Member of Parliament, I was responsible for producing and bringing before the Government real evidence of abuse of public funds. I brought it to the attention of the present Prime Minister. Unfortunately, that information was ignored by the Government and their agencies for what I can only describe as political expediency. I make that indictment of the present Government, just as I indict the right hon. Member for Barnsley, Central for his lack of knowledge in doing a deal and jumping rather hastily into bed, metaphorically speaking, with John Zachary De Lorean.
I pay tribute to a colleague in the right hon. Gentleman's party, Mr. Bob Cryer, the then hon. Member for Keighley. Mention has already been made of my hon. Friend the then Member for Knutsford, now Lord BruceGardyne. Also, I pay tribute to my hon. Friend the Member for Wolverhampton, South-West (Mr. Buclgen), who in this House sought time and again to bring the Government to their senses in their dealings with John Zachary De Lorean but, sadly, all to no avail.
It is significant that when I gave my Government ample evidence of the abuse and misuse of public funds they refused to act. Initially, they set up a police inquiry and police officers came to see me in my home in Cheshire. I released to them documents that had been presented to me by John Zachary De Lorean's personal assistant, who is a British citizen. I did not consider myself an expert in these matters and, therefore, I handed the documents to the highest office in the land, through representatives of the fraud squad of the Metropolitan police.
The matter was taken even further because police officers were sent to the United States. They were about to meet one of the most vital witnesses, Mr. William Haddad, a senior executive of the De Lorean Corporation, when, for some extraordinary reason that has never been explained, they were summoned back to London to report. Mr. Haddad could have confirmed in considerable detail the outline of abuse contained in information that I had given and in the many papers revealing the lifestyle of John Zachary De Lorean.
I should say to the right hon. Member for Barnsley, Central (Mr. Mason) that the one person who took advantage of the Concorde programme, which the right hon. Gentleman ran down, was John Zachary De Lorean. He did not travel cheaply at the United Kingdom taxpayers' expense. He travelled by Concorde, and perhaps the right hon. Member for Barnsley, Central should have directed his attention to that fact in his lengthy


speech. Mr. De Lorean was supposed to be in charge of the company, yet he never spent a night in Belfast. He went into Belfast and flew out again as fast as he could. He spent British taxpayers' money as if it were confetti.
The right hon. Member should consider the evidence that has subsequently emerged about Mr. De Lorean's lifestyle—the pictures and works of art that he bought and the fact that cleaners in his Manhattan office complained that they could not do their work because of the clutter of expensive works of art and paintings that he had purchased in this country with British taxpayers' money.
If we want to get jobs into Northern Ireland, we must do business with people who are honourable. This man was certainly not honourable, as would have been revealed if his career and pedigree had been looked at in depth before the agreement was signed.
It is sad that I have to indict Governments with dishonesty and duplicity and that I have to indict individual Ministers with incompetence and, at best, apathy in dealing with this affair. Evidence was presented to the Prime Minister, and the Attorney-General was involved. I had a personal interview with my right hon. Friend the Prime Minister in her drawing room in Downing street. I wanted to take my solicitor with me—as a friend and not in an official capacity—but I was not permitted to do so. When I arrived at Downing street, I was faced not only by the Prime Minister, who clearly knew little about the matter, but by the Attorney-General and the Prime Minister's private secretary and her parliamentary private secretary. It was a lovely four to one situation.
When I put questions to the Attorney-General or to the Prime Minister, she referred them all to the Attorney-General and he replied as if he were some sort of dalek. He said that there was no evidence of criminal abuse. I had never said that there was. I had alleged that there was a massive abuse of public funds. That was my allegation.
I believe that my actions were justified and honourable when I brought matters to the attention of the holder of the most powerful office in this country. Parliament was not sitting and I was unable to use parliamentary privilege to raise matters, and subsequently I faced a suit for defamation from Mr. De Lorean and his company for $250 million, which at that time was the equivalent of £133 million. I was being sued for doing no more than my duty.
The right hon. Member for Barnsley, Central has tried to establish that what he did in respect of the agreement with Mr. De Lorean was his duty as a Minister trying to reduce unemployment. I accept that it is a Minister's duty to reduce unemployment, though I believe that what the right hon. Gentleman did with Mr. De Lorean was wrong, and I hope that the right hon. Gentleman will agree that I acted correctly when I was given evidence which I believed merited further investigation by those who had the expertise to deal with it.
I acted confidentially. I was subsequently identified by Miss Marion Gibson, who was a member of Mr. De Lorean's personal staff, to a journalist in America. Therefore, I was obviously pressed to make some comment to the media in this country. The right hon. Member for Barnsley, Central sought to justify his actions, and I hope that he will agree that my actions were both correct and honourable.
Where were the Government in supporting an hon. Member who had revealed what the PAC calls a "massive" abuse of public funds? Did they want to know me? Were they prepared to assist me? The answer is no. Governments in this country are on trial for the way in which they are prepared to deal with people who seek to help them.
I have nothing to lose in this matter. As many hon. Members know, the action by Mr. De Lorean and his company against me was struck out. In front of a master in the High Court, I was awarded £15,000 for defamation against Mr. De Lorean who had made some unjustified remarks about me. I am glad that the right hon. Member for Barnsley, Central is nodding in agreement. I will not see a penny of that £15,000 because of Mr. De Lorean's superficial insolvency, though it is interesting to see that he was released—on a technicality, in my view, because of the blunderbuss tactics of the FBI—during his drug trafficking court case. In every way, in my view, he was absolutely guilty and was trying to get money to buy himself out of trouble, which was typical of what he had done all his life.
I was faced with massive legal fees and the Government did not want to know. I am convinced that if I had lost there would have been a number of smiling faces in the Cabinet. They would have said, "One inconvenient nuisance out of the way." That is not the way for a Government to act. They were dishonourable in disowning a colleague who had done a service to this country. I am not being immodest about what I did, because I did what I believed to be right.
The Attorney-General did not want to know. He kept replying to my questions by saying that there was no evidence of any criminal misuse of public funds. I had never made that allegation. The PAC said:
While we consider that the De Lorean plans were impracticable from the start, it has been argued by both Sir Kenneth Cork and McKinsey that a less ambitious operation aimed at producing under 10,000 cars a year, mounted with an eye for strict economy"—
clearly the right hon. Member for Barnsley, Central would not agree with that—
and without the massive misappropriation of funds which took place, might have succeeded".
That is what I said six months before the receiver was called in, but the Government took no action and did not want to know. Indeed, I believe that more funds were advanced to the company before it went bust.
The report continues with the passage quoted by the right hon. Member for Ashton-under-Lyne:
The blame for this lies principally with Mr. De Lorean personally, but hardly any of those who dealt with him on behalf of the British taxpayer at a high level can escape substantial blame or criticism for their failure to prevent a major waste of public money.
How did Mr. De Lorean spend all that money and why was no action taken? I hope that my hon. Friend the Minister will tell us how many people, if any—and who they were—lost their jobs as a result of the incompetence and the squandering of taxpayers' money involved in the De Lorean affair.
I could tell the House many things about this case, but unfortunately it would do nothing for the image of Parliament. Mr. De Lorean was clearly concerned only with his own image in reaching a deal with the British Government. I am sad that certain of my right hon. and hon. Friends who served as Ministers in Northern Ireland—for instance, my hon. Friend the then Minister of


State, now Minister of State for Defence Procurement, did not come clean about this. Mr. De Lorean browbeat the then Minister of State with telephone calls urging him to "stop that man in London saying those things." Ministers must have known what was going on. It is a pity that they were not prepared to act or to take a parliamentary colleague into their confidence and say, "We cannot say this publicly, but we assure you that we are taking action and that these matters are being investigated." The Government stand rightly indicted for apathy, incompetence and wasting public money, although I am a little reassured by the fact that certain new criteria have been laid down by the Government to try to prevent a recurrence of this kind of abuse.
I have one further question for my hon. Friend the Minister to answer when he replies to the debate, as this information was not given by the right hon. Member for Barnsley, Central. I should like to know just how much finance Mr. De Lorean put up front. He was supposed to put up a substantial amount. The right hon. Member for Barnsley, Central referred to some 120 investors from America, mainly from New York, but how much of that money was ever actually put up? I do not believe that Mr. De Lorean put up more than about $750,000 himself, although he should have put up 10 times that amount to match the money provided by the British Government.
The House should be ashamed of Government for what Government have done with taxpayers' money. I pay tribute to the right hon. Member for Ashton-under-Lyne and to members of the Committee for the extremely hard and detailed work that they put into producing the report. I only wish that the baseline for what they were able to do had allowed them to make deeper, more relevant inquiries as to why this occurred and who was to blame so that action could be taken against those responsible for one of the most flagrant and massive abuses of public funds. The right hon. Member for Barnsley, Central talked about bringing jobs to Northern Ireland, but I bet that the basis of any agreement with any of the other companies was not that agreed with John Zachary De Lorean, who is about to make about $1,500,000 from sales of his memoirs.
I tell Mr. De Lorean from this Chamber that if he ever sets foot on the shores of the United Kingdom a writ will be slapped on him for the money that he owes me.

Mr. Latham: Hear, hear.

Mr. Winterton: I am grateful for the support of my hon. Friend, who served on the Committee and played a major part in its inquiries.
I hope that the Government will give an assurance that if Mr. De Lorean ever sets foot in this country he will be arrested and that any assets that can be taken by the Government will be taken. It is possible that his book will be brought out in this country. That may help to repay some of the debts that this man owes not only here but in America and in many other parts of the world. Am I to have the assurance that the Government will have him arrested and take any resources that they can take from him? I believe that assurances to that effect will allay some of the fears of the people of this country who feel desperately let down because money has been poured down the drain.
The right hon. Member for Barnsley, Central should be aware that I am extremely sorry for the people who expected long-term employment rather than employment

merely while it suited Mr. De Lorean, who always intended to walk away from the project. I am sorry for the work force of 2,600 in west Belfast and elsewhere. Those people were let down, and the taxpayers of this country were also let down, but those responsible have remained completely unpunished and it is time that they received their just desserts.

Mr. William O'Brien: The hon. Member for Macclesfield (Mr. Winterton) has asked the Government for an assurance that if Mr. De Lorean sets foot in this country he will be arrested. Having listened to the hon. Gentleman's speech, I believe that some members of the Government, including the Prime Minister, should also be arrested, in view of the way in which they ignored the hon. Gentleman's advice and his requests for action to be taken against De Lorean. The hon. Gentleman should pursue the matter further, because if his comments are justified those people should certainly be arrested.
If the comments of the right hon. Member for South Down (Mr. Powell) in reply to my right hon. Friend the Member for Barnsley, Central (Mr. Mason) about there being no justification for entertaining an enterprise of this kind in Northern Ireland are correct, perhaps he will tell us where that is recorded in the Official Report before the transaction got under way and the main contracts were signed. One would expect a Member of Parliament with the experience of the right hon. Member for South Down to have made his views known before the event, rather than merely criticising it afterwards.
My right hon. Friend the Member for Barnsley, Central tried to explain his position. As a member of the Public Accounts Committee, and even in local government, one of my main objectives has been to find ways of saving public money, and I hope to continue that in the House. There are lessons to be learnt from the investigations that have been carried out. The fact that the Government have accepted the main recommendations in the report gives some satisfaction to members of the Committee, who spent many hours asking questions, reading documents and producing the report. That acceptance is pleasing to note and it is some reward for the work done.
The De Lorean affair is a matter of great interest because of the amount of money involved and the way in which it was spent. It is clear from the volumes of evidence that we obtained that when the matter was first considered it was with the good intention of trying to reduce the alarming rate of unemployment in west Belfast, which was running at twice the national average. The way in which the project was presented to Ministers and officials at the time suggested that it provided a real opportunity to create jobs by building a type of sports car which, it was said, was in demand at that time.
The negotiations took 45 days. There is no doubt that, following them, De Lorean walked away with the deal of a lifetime. It was what he wanted—it was more than he expected to achieve. It was more money than anyone offered out of Puerto Rico or Ireland. He created new hope of employment for the people of Northern Ireland. My colleagues can explain better than I that people had grown up, married and had children without ever having held a job. The possibility of a motor car factory in Northern Ireland gave new hope and the possibility of a new way of life to those people. They thought that they would be able to buy things which they had never been able to


afford. Their social life changed. They were able to go out with the family and to afford holidays—something that had never happened before. There was a genuine belief that a motor car factory would be developed in Northern Ireland.
The evidence makes it clear that soon after the scheme had been put forward the gratitude of De Lorean evaporated. I understand that he made scathing remarks about the British Government and officials in Northern Ireland. His interest waned. On more than one occasion he said that the British Government would receive only the information that he wanted them to receive. He could not care less about the work force in Northern Ireland.
It is obvious from the evidence that he was advised of the difficulties with some of the monthly and long-term budgets, but his attitude was "If we have overspent the budget, adjust it." There was a total disregard of warnings. We have been told that he spent the money given to him by the British Government on high-class furnishings, works of art, Mercedes cars and his private business ventures. There were people on his payroll who were not actually employed in the industry. The evidence shows that that character was not interested in the developments in Northern Ireland—he wanted to develop a lifestyle which was open to many questions.
There was a genuine attempt to reduce the number of people out of work in Belfast. I understand that to begin with 600 people were taken on, and it was believed that one year later that figure would rise to 1,000 and two years later to 1,500, with a proposal to increase the labour force even further as time passed. The evidence shows that the increase in production meant a surplus of cars. Indeed, the quality of the cars left a great deal to be desired.
There is also the question of the "walkabout" £10 million paid to Lotus. It is possible that that amount was paid twice. No one can trace where that payment went. Press reports say that De Lorean claimed that he was swindled by Mr. Chapman of $17·65 million. That can never be proved, but De Lorean sticks to the argument that he was conned. We must consider that very carefully.

Mr. Latham: We must get the matter fairly on the record, because the hon. Gentleman may have slipped up in the way that he presented it. Wherever that $17·65 million went, it was not to Lotus.

Mr. O'Brien: De Lorean claims that he paid twice that amount. We can never prove that. The report states that there was an approach to Lotus from De Lorean and that its services were secured. It is against that background that De Lorean claims that payment for the services of Lotus was made twice. That will never be proved.
The contract for $5·15 million with GPD was open ended. There are many questions to be answered, as it was a major transaction with no real contract. I hope that the Government will note that. The accountants studied the matter in detail and their conclusions are listed in the report. I hope that that will influence any further contracts into which the Government may enter.
There is a question about the future troubles of De Lorean. The Government must pursue the claim for $17 million. It is said that this sum has been repaid, but a great deal more has yet to be recovered. I hope that the further repayment will be pursued by the Government. I hope also

that the PAC's observations will be in the Government's mind constantly and that every effort will be made to ensure that problems of a similar nature do not recur.
The British Government had two nominee directors on the De Lorean board and it is vital to lay down the duties of nominated directors. As the Minister said, if a nominated director cannot report back to the Government, he should resign. We questioned the directors on the procedures that were implemented when board meetings took place. We were advised that De Lorean called meetings at short notice and that on occasions relevant information was put into the hands of directors only as they arrived for the meetings. Reports were made available at short notice and board members did not have the opportunity to discuss them. They did not have the opportunity properly to make representations.
We questioned the directors on the nature of the reports that were prepared by the company and on the minutes that were produced. We were advised that the reports and minutes were brief and included little detail. In other words, there were inadequate reports of board meetings. I remind the House that John De Lorean said that he would allow the Government to have only the information that he wanted to let them have. That suggests that he was not prepared to supply the Government with proper information.
We must take cognisance of the way in which minutes of meetings and agendas were produced and submitted. If the Government are to place nominee directors on boards, there must be an awareness of the procedures that will apply and the way in which they will be implemented. If the procedures are not in keeping with good practice, we should be informed and we should take steps to ensure that the problems that accompanied the De Lorean project do not recur.
The report highlights deficiencies in contract arrangements, in negotiations and in the examination of those who would be involved in commercial transactions. It is encouraging to know that the Government are prepared to accept the Committee's recommendations, in the hope that we shall not be faced with similar problems. Of course, this is not the first PAC report to be accepted by the Government. The Committee's reports have helped to develop a better understanding of the way in which public money should be spent.
I hope that the De Lorean experience will not lead the Government to deny further investment in regions of the United Kingdom where there is high unemployment. There must be public investment. I hope that the Minister will give an assurance that the Government will include the areas of high unemployment in the north of England in a programme of public investment to help to reduce unemployment. The De Lorean experience should not influence them to restrict or deny further public investment.

Sir Michael Shaw: I shall speak only briefly, in view of the time. I agree with the hon. Member for Normanton (Mr. O'Brien) that we should not seek to deter proper investment to give assistance to the areas which need it most, especially those with long-term unemployment. Investment is one of the solutions to that problem. However, money that is spent unwisely is money that is not available for the very wise investment that the hon. Gentleman seeks. It is essential that money that is put


aside for investment is seen to be used properly and for the long-term advantage of the nation. That must be one of our continuing concerns when examining these matters.
I add my congratulations to those which have already been offered to the right hon. Member for Ashton-under-Lyne (Mr. Sheldon), the Chairman of the Public Accounts Committee. The report is one of the most important that the Committee has produced for many years. There is some real meat in it, which should be eaten and digested by Governments of all complexions. That applies especially to the sections of the report relating to nominee directors. Too often in the past such nominations have been made as sinecures for those who have done good service or as a sop to public opinion. On occasions it has been said, "Do not worry. We have a couple of nominee directors on the board, so everything must be all right." Nominee directors carry a grave responsibility, and the Committee is continuing to address itself to their role.
I do not believe that the Committee tackled its task lightly, and nor did we deal with it superficially. The right hon. Member for Ashton-under-Lyne referred somewhat derisorily to the part of the report which suggests that the De Lorean project was one of the gravest examples of the misuse of public resources to appear before us for many years. Perhaps his derision was directed to those who allowed it to take that course. I consider the suggestion that the project was one of the gravest examples of the misuse of public money to be absolutely true.
Bearing in mind the time, I shall confine myself to one issue only. It has rightly been said that the Committee does not deal with political decisions. The Committee examined the facts as far as it was able to do so, but any debate in the Chamber must embrace the consequences of the report and their effect on Government action.
The original decision to establish De Lorean in Northern Ireland was taken after consultation with various people, including the Industries Development Advisory Committee. The Comittee was consulted, and it was told that because of the shortage of time there would have to be a political decision. In other words, it was thought that the Committee should not pronounce upon it. Mr. Bloomfield was the permanent secretary at the time of the Committee's inquiry but not at the time of the events with which we were concerned. When I was questioning him on these matters, he said:
They said essentially"—
that is, IDAC—
'You tell us that you are going to have to make a judgment about this within a very limited timescale. It really is going to be difficult, almost impossible, to thoroughly appraise this as a commercial proposition in that time scale.'
Mr. Bloomfield was paraphrasing what the IDAC had been saying. He continued:
Therefore there is really nothing useful we can say to you.
Mr. Bloomfield is there referring to the Government. He added:
'It is going to have to be in essence a political decision as to whether you accept these risks or not.' That was the status of the IDAC involvement.
No commercial disciplines were set within which the Government could make a decision. Of course, there was the McKinsey report. McKinsey was working on the scene at the time, and was asked to produce a quick report. But it is notable that in one report, McKinsey said:
Six days is clearly inadequate for a serious evaluation of a major investment.
I criticise McKinsey for the fact that it simply pointed out four main risks. It admitted that during the time available

it could not evaluate those risks. The company proved to be exactly right about those four areas, but the size of the risks was not known because there was no time to examine them in detail.
I fully understand the great difficulties and pressures faced by Mr. Bloomfield and by the right hon. Members for Barnsley, Central (Mr. Mason) and for Mansfield (Mr. Concannon). However, if money is to be well spent, harsh though it may be, decisions must be taken within the commercial discipline laid down at the time.

Mr. Concannon: Would the hon. Gentleman care to reflect on other Select Committee reports, notably one from the Select Committee on Trade and Industry? Many other decisions made in Northern Ireland at the same time have been extremely beneficial to the Province.

Sir Michael Shaw: I do not have in front of me any documents to show the parameters of the risks involved and the commercial judgments which formed the basis of advice given to the Government at the time, so I am afraid that I cannot. I am now looking to the future. The main purpose of the Committee's inquiry was to find out how to do things better in the future. The £77 million that we wasted on that venture was not available for another venture which might have been of long-term benefit to the Province.
One of the most important points made by McKinsey was that we should not be rushed into a decision. Anyone connected with business will know that the best way to get someone to do what one wants him to do is to rush him. Do not give him time to think. Say things like, "Someone else wants the job and this is your only chance." It is the commonest sales trick in the world and, whatever the motive, we should not have fallen for it, especially as we were using public money. As the right hon. Member for South Down (Mr. Powell) said, we must also assess the man. The wrong assessment was undoubtedly made in this case.
After a decision is taken, there should be a clear understanding of how the project should progress. If things go wrong, we must be prepared to turn off the taps as quickly as possible. It is easy to be jollied along for years with people saying, "Just give me a little bit more to keep it going."
I could have said many things about this matter, but I wished to emphasise those points strongly this evening.

Mr. George Park: It was inevitable and right that the Public Accounts Committee should investigate what has been described several times today as
one of the gravest cases of the misuse of public resources to come before us for many years.
But, given the circumstances, it was essentially a stirring of dead ashes, with the added ingredient of Northern Ireland, which in addition to all its other troubles has the highest unemployment in the United Kingdom
Ministers and officials, who may be discomfited by the stringency of the 25th report and by the fact that the PAC has the benefit of hindsight, clearly approached the De Lorean project as they would a normal project, but John De Lorean is not a normal person, and the circumstances in Northern Ireland are not normal. They were led like lambs to the slaughter. It did not help the unemployed to have public money intended for their assistance siphoned


off by a con man He immediately put officials of the Department of Commerce under pressure by requiring decisions in principle in just more than a fortnight, on the basis that offers of assistance from other places had already been made. He omitted to mention that the Republic of Ireland had already withdrawn its offer, and that he was in difficulties with the offers from Puerto Rico, Detroit and elsewhere.
The project was outlined on 8 June 1978. By 29 June a joint team from the Department of Commerce and the Northern Ireland Development Agency had visited Detroit to make further inquiries and to be impressed by a stage-managed presentation. But the team made no inquiries of American banks, financial institutions or automobile companies about the De Lorean project.

Mr. Concannon: That is simply not true. Many inquiries were made. I must stress that during all those inquiries of individuals and institutions not a wrong word was said about De Lorean. I can assure my hon. Friend that I looked in some strange places.

Mr. Park: I respect my right hon. Friend's sincerity, but I should tell him from my experience of 25 years in the motor industry that no one would have told him anything detrimental to De Lorean, because they wanted shot of him. I am afraid that my right hon. Friend was hoodwinked. I am not here to pick holes in former Ministers or officials. They approached the matter normally, as though it were a normal project. However, as the PAC went through the mountains of evidence, it became clear that it was a completely abnormal position, revolving around an abnormal man.
The Department of Commerce commissioned McKinsey to assess the risks, but then accepted the assurances of De Lorean rather than the McKinsey report, which had put its finger on most of the main weaknesses of the project, especially the fact that it depended largely on one man—John De Lorean. That was the fatal flaw in the scheme. Under his sustained pressure, it had taken only 45 days to reach an agreement which required little or no financial commitment from him and an initial £54 million, later £77 million, from the Government in grants, equity and loans.
The PAC report states:
the prospect of creating large-scale employment in West Belfast proved so irresistible to DOC as to diminish its sensitivity to the commercial risks involved".
Even then the project might have become viable, because in five months the factory had been completed and equipped and production started. However, despite its long gestation period in the United States, further research and development were needed. This was to be done by Lotus Cars, through a Swiss company, GPD, for a fee of £6·25 million, approximately. Additionally, De Lorean Motors paid GDP/Lotus a further £11·5 million for alleged development work, and that was paid in advance. Subsequently, it was found that none of the initial sums paid to GDP had been received by Lotus.
Through his team and the co-operation of the work force in west Belfast, De Lorean had kept to the promises made to the Government about the start-up of the project and the employment of labour. That was no mean achievement, but it could not sustain the financial needs of John De Lorean himself or the high salaries of his basic

team. The whole thing was expanded well beyond its capabilities. At the same time, officials of NIDA and nominee directors were finding increasing difficulty in pinning down De Lorean on either information or his various financial transactions.
The PAC has not finally completed its report on the De Lorean saga. Loose ends remain which I doubt will ever be tied up. The lessons to be learnt are that officials must always insist on technical assistance in areas outside their competence when in negotiation, that financial agreements must be tightly drawn and that monitoring in cases where assistance has been given must be strictly maintained. There must be further clarification of the role of nominee directors.
As in the case of De Lorean, charisma must not be allowed to blind officials or Ministers to the hard financial realities. I am pleased to note that the recommendations made by the PAC have been accepted by the Minister, but, as has been said, I would not Want the De Lorean experience to deter further Government investment to ease the problem of unemployment.

Mr. Michael Latham: The main problem in dealing with the De Lorean scandal is the vast amount of material that is available. Some of the world's most determined and expert financial wizards are still pursuing the missing millions that went walkabout. The PAC report is full of essential detail. I shall concentrate on five basic questions. First, should the project ever have been allowed to go ahead? Secondly, could it have been stopped? Thirdly, did the Government-appointed directors do their job? Fourthly, was GPD a rip-off? Fifthly, who was to blame?
First, should the project have been given the go-ahead? As has been said several times, we can all understand the humane motivation of Ministers in 1978. A charismatic superstar rode out of the west offering 2,000 jobs in one of the worst unemployment areas in Europe, which was also plagued with terrorism. We now know that he was not adequately checked out personally. We know that Northern Ireland was his fourth choice. Indeed, that was also known at the time. He hustled the Department into much too quick a decision. The Government's own business watchdog, the Industries Development Advisory Committee, washed its hands of the matter, and turned the decision over to the politicians.
The McKinsey report, commissioned by the Government, sounded a grave warning. Sir Lindsay Ring, a member of the NIDA board, told NIDA at the time that it had neither the time nor the information to decide whether the project would work. The master agreement was much too generous to De Lorean; it allowed the New York company to call the shots from the start. There was no independent engineering approval.
In that regard, it is worth contrasting the tone of what Ministers said to the House at the time with what witnesses told the PAC. For example, the then Under-Secretary of State for Industry, Mr. Les Huckfield, told the House on 14 February 1979 that the Secretary of State for Northern Ireland had kept the Secretary of State for Industry
informed at all stages and consulted my Department as appropriate."—[Official Report, 14 February 1979; Vol. 962, c. 564.]
On 5 March, the right hon. Member for Mansfield (Mr. Concannon) repeated:


The Department of Industry was fully consulted … detailed technical assessment of vehicle prototypes was not considered to be a necessary requirement".—[Official Report, 5 March 1979; Vol. 963, c. 587.]
Both, of course, were saying what they had been perfectly properly advised.
On 23 November 1983, Mr. Ken Bloomfield, the permanent secretary, told the Select Committee that the Department of Industry had not offered any assistance with an engineering evaluation, that it had not been asked for it and that it probably would not have been able to provide one anyway without calling in outside experts, for which there was no time. The project should never have been allowed to go ahead on that basis. We all know that to be true, and it is implicitly accepted in the second lot of replies from the Northern Ireland Office to the Committee a few months ago.
My second question is: should the project have been stopped or the master agreement renegotiated during the work? It could have been killed off by the incoming Conservative Government. Mr. Jock Bruce-Gardyne, then the hon. Member for Knutsford, asked about that in the House on 26 July 1979. My hon. Friend the Member for Pudsey (Mr. Shaw), who was then Under-Secretary of State, Northern Ireland Office, replied that the Government had
made clear their intention to continue to support the De Lorean project, and there is no question of terminating their contracts with the company."—[Official Report, 26 July 1979; Vol. 971, c. 436.]
However, nothing happened after the meeting on 27 September 1979 between NIDA, Mr. De Lorean and Mr. Cafiero, at which Mr. Faulkner and Mr. Hopkins of NIDA were very critical of the financial control of the company and of the extravagance in New York. Nothing happened after the highly critical NIDA board meeting of 19 December 1979, except that it took the chairman, Mr. Faulkner, a month to write another highly critical letter to Mr. De Lorean. Nothing happened after 27 June 1980, when Mr. Hopkins of NIDA telexed Mr. De Lorean telling him that the company must live within its means.
The following month Mr. Hopkins even temporarily cut off the funds, and in the summer of 1980 directors of De Lorean Motor Cars Ltd took legal advice to see whether they could legally continue to trade because Government finance had been temporarily held back. By that stage Mr. Hopkins himself, the chief executive of NIDA, and a member of the De Lorean board, had come to the conclusion, which is in the report, that the nominee directors were powerless, that the master agreement must be renegotiated and that that could be done only the next time De Lorean asked the Government for more money.
On 28 July 1980 Mr. De Lorean restructured the DMC board in New York and put his wife on it without telling the nominee directors. He then bypassed NIDA and got another £14 million out of the Secretary of State without the master agreement being renegotiated and without NIDA being present at the meeting on 5 August, despite, a specific request by Mr. Hopkins that he should attend. In my view, that was the crucial opportunity—which was, alas, missed—to rein back the project. After that it was all downhill, with more good money being thrown after bad throughout 1981 until the final debacle of early 1982. It could have been stopped. The agreement could have been renegotiated. For perfectly honourable reasons it was not, because of the existing financial commitments,

and the wish to preserve jobs and prevent more disorder in Northern Ireland. The opportunity was there, and it was not taken.
Thirdly, did the nominee directors fail in their duties? The answer is clearly yes, and it is both implicit and explicit in their testimony and in the report. None of them resigned despite their continuing dissatisfaction with the way in which Mr. De Lorean treated them or his contemptuous response to their pleas for more economy or better financial control. They come badly out of the PAC inquiry, and none of them should ever be used by the Government in such a capacity again.
Fourthly, can there be any honourable explanation of the GPD affair? I fear that it was a deliberate rip-off from the start. There is no other credible explanation. A few facts are clear. Mr. De Lorean and the late Mr. Cowin Chapman already knew each other and they did not need Mr. and Mrs. Juhan, trading as GPD, to bring them together. Indeed, De Lorean had previously discussed buying Lotus with British taxpayers' money. The ostensible reason for the GPD arrangement was to distance Lotus from possible American liability and warranty claims and to protect it from the new Conservative Government cancelling the De Lorean project. The agreement was worked out in Geneva in November 1978 by De Lorean and Chapman. The DMC board was told that the agreement was to deliver the services of Chapman and that he wanted it that way. In fact, it illegally delivered $17·65 million of American investors' and British taxpayers' money. None of it went to Lotus.
Since Lotus was not paid twice for the work that it did on the car, regrettably it must by said that Colin Chapman could not have told the truth to the receiver, Sir Kenneth Cork, in November 1982 when he denied all knowledge of the $17·65 million. He said that he knew nothing about it, and even that he never saw the GPD contract. I have no doubt that Chapman helped to draw up that contract in Geneva in November 1978.
The money did not go to Lotus as a firm, which is not to be blamed, but it certainly went somewhere. Both De Lorean and Chapman have concealed the truth, and the memorandum which Chapman prepared for the PAC before his death—it appears in volume 2 of the report—is less than frank and contains obvious untruths.
Some people have argued that De Lorean conned Chapman. Others, such as The Mail on Sunday, suggest that Chapman conned De Lorean. The truth is best put in the book to which the the right hon. Member for Ashton-under-Lyne (Mr. Sheldon) referred, which said:
In our research on this book, we have found those close to Chapman believed that De Lorean had it all and that those close to De Lorean believed that Chapman spirited it away. That one or both of them did so is almost beyond doubt.
The explanation that is, alas, most likely is that the entire deal was a con on the investors and the British taxpayer.
Whatever the truth, some words accurately describe the outcome of the GPD transaction. The Committee's report uses the word "mispropriation." The alternative words for plain folk would be "swindle" or "theft." It must have seemed the perfect sting. It deceived NIDA, the Department and everyone else.
To our shock, we now know that De Lorean talked his board into a snap decision to approve the arrangement in advance and that NIDA's chairman and chief executive agreed after a cursory discussion the following day. A perfect sting indeed, which might never have been


discovered if De Lorean's empire had not foundered. No one chose to ask why Lotus was being paid month by month for work in respect of which it had already been pledged $17 million under contract. The marks for that sting were all our constituents and the American investors.
Who is to blame? After the Committee's report appeared, it was well received by all except two media experts. Ivan Fallon wrote a brilliant book on the whole squalid mess. That was available and invaluable to the Committee. Jock Bruce-Gardyne, now in another place, regularly questioned Ministers about De Lorean when he was in this House. Lord Bruce-Gardyne has always believed that the PAC was an unsuitable vehicle for the inquiry and that a special Select Committee should have been set up to question former Ministers or those still serving at the time when the company failed. He and Ivan Fallon believed that, because both Labour and Conservative Governments were involved, the House would be reluctant to take the matter further.
There is truth in such criticisms. I doubt whether any other committee could have done the job more thoroughly. The PAC has the inestimable benefit of the full backing of the Comptroller and Auditor General and his staff. No one has disputed the thoroughness of the report and Mr. Fallon himself was kind about it in his articles.
When the report appeared I was distressed by some of the cynical letters that I received saying that nothing would change. For example, a business man in Bournemouth—one of 2,000 unsecured creditors—who lost £6,000 through his firm, said that Whitehall never ran short of whitewash and that our labours on the PAC would be in vain.
I drew such letters to the Prime Minister's attention. She said that the affair was taken most seriously by the Government. In a letter to me, my right hon. Friend said:
Every effort will continue to be made to recover funds due to creditors and to bring to book anyone who may have committed a criminal offence.

Mr. Nicholas Winterton: In that case, when I saw the Prime Minister and revealed two folders of documents in 1981, why was no action taken? Both the Prime Minister and the Attorney-General stated to me subsequently, when the inquiry was called off—for reasons for which I have no explanation—that there was no evidence whatsoever to indicate that there had been criminal abuse of public funds. How could the Prime Minister write that letter when she had evidence upon which the Government could have acted in the early autumn of 1981?

Mr. Latham: To be fair to my right hon. Friend the Prime Minister, the letter to me was written last summer, and my hon. Friend the Member for Macclesfield (Mr. Winterton) refers to what took place in 1981. I cannot speak for the Prime Minister, but the explanation appears in the book which is available to anyone who wants to read it.
Although the tone of the Prime Minister's letter to me was good, she told me in two parliamentary answers on 30 October 1984 that no public officials had been reprimanded, retired on grounds of limited efficiency or otherwise disciplined as a result of the De Lorean affair. She said that two of the officials closely involved in the

monitoring of De Lorean between 1978 and 1982 still had responsibilities for approving finance for industrial projects.
I do not really blame Ministers. None of the Secretaries of State involved is still in office. They were all honourable men who believed that the project would provide jobs and hope. They fought to start the project and they fought to save it. That was a decent and honourable reaction. We would all have done the same in their place.
However, Ministers must constitutionally accept the blame for the serious failures of their officials and the totally unsatisfactory monitoring and control arrangements. The current chief executive of the Industrial Development Board for Northern Ireland, Mr. Saxon Tate, spoke to the Committee about laxity within the organisation which he now runs but with which he was not then involved.
In my view, NIDA's role and that of the nominee directors represents a long and dismal chronicle of negligence and incompetence which was not checked by the Department of Commerce or by this House. Mr. Tate confirmed to me that no heads have rolled, and I do not expect now that any will.
About £70 million has been lost, much of which is beyond recall. More than 2,000 United Kingdom workers lost their jobs, an area which had some hope of work lost that hope, and many creditors have lost their money. It has been a sad, bad story of greed, fraud, incompetence, laxity and neglect. It is all revealed in stark and depressing detail in the report. The duty of the House is to insist that all Governments never allow it to happen again.

Mr. Michael Morris: I am pleased that the Government have accepted the PAC's recommendations. I have been deeply involved in the inquiry, and the Committee has had to wade through as much evidence as any other Committee has ever had to consider.
Since producing our report, I have reflected on the implications for the future. Four additional implications have not been highlighted in the debate, although one has been mentioned. The first is that I believe that it is unacceptable for the Public Accounts Committee to be delayed in carrying out an inquiry into the misappropriation of Government money because a judicial or police inquiry is taking place.

Mr. Nicholas Winterton: That was intentional.

Mr. Morris: The Committee was delayed for over 12 months. I objected to the delay in the Committee at the time to the then Chairman, but I was overruled. The delay was unfortunate. I hope that never again will the PAC be prevented from investigating the misappropriation of public funds because a law case is pending.
Secondly, there is the question of time. I remain mystified why the Secretary of State for Northern Ireland was given only 16 days in which to reach a decision. It seems to me that the Government failed properly to search the world for footloose investment. We should have known what was happening with Puerto Rico and Detroit. Inquiries should be made of the Invest in Britain Bureau to ensure that our investigation of footloose investment throughout the world is as good as possible. Our Ministers should never again have to make a decision in just 16 days.


Thirdly, I feel that Ministers and their advisers were not well assisted by the professional advisers who were called in. We have heard quotations from the McKinsey report which show that the initial summary was blunt and forthright:
In summary, the Department is being asked to fund an extraordinarily risky venture. The combination of DOC grants and NIDA equity investment will mean that a large proportion of the financial risks will be carried by the UK taxpayer in return for a 22 per cent. stake in the company, if it can succeed in overcoming the odds.
Document PAC 8, therefore, contains a pretty strong report. However, as one looks at the work of McKinsey over succeeding months, one is disappointed to find that the firm's analysis became less critical.
In 1980 McKinsey was asked to assess whether the company was adhering to the terms of the master agreement of August 1978. We know that by the time the letter was written in May 1980 it was not. However, McKinsey wrote a letter to Mr. Hopkins saying:
In our view, the company is adhering to the terms of the master agreement.
McKinsey was asked by NIDA to do an analysis of the sales potential of the product and in a letter dated 31 July 1981 the firm said:
The DMC 12 has generated substantial interest, and De Lorean himself has created considerable awareness of the car … There appears to be great demand for the car at prices $6,000 above manufacturer's recommended price … The impression gained from this brief inspection of dealers is that the initial launch has been most successful with dealers and customers. We are very happy that the DMC 12 satisfies American quality and drive standards. Supply is the only constraint.
That too, turned out to be untrue. I do not believe that Mckinsey emerges from the affair too well.
It is true that there was no exchange control, but what were the company's bankers doing at the time? Not merely a few thousand dollars, but hundreds of thousands of dollars, were disappearing overseas. All the members of the Committee had a letter from the auditors this week. It was written by the United Kingdom senior partner who, in essence, complains that the good name of Arthur Andersen has been besmirched by the fact that the Northern Ireland Department of Economic Development has served a complaint against it and other Arthur Andersen partnerships because the United States' racketeer influence and corrupt organisation provisions have been involved.
The letter contains a reference to Volume II, Appendix VIII, Annex—Part 2, as evidence of the good work of the firm. However, Arthur Andersen made it plain in its evidence—I refer to page 26—that it based its verification of expenditure simply on a letter from a company. That suggests to me that the company was not being searching enough. One employs auditors—especially of public money—to ensure that the difficult questions are asked. They should not accept the situation on the basis of a letter. They should look behind the back door to find an answer.
I do not think that Arthur Andersen comes out of the affair too well either. I believe that my view is supported by the work undertaken by Cork Gulley since it took over the liquidation side. I have been extremely impressed by the firm's detailed investigation and the extent to which it has managed to trace where money has gone. It is to the credit of Cork Gulley that a certain amount of money has already come back to the Exchequer. We await with interest the firm's further action in the United States. The

lesson is that the Government should employ the best outside people they can find, and that the parties themselves have a major responsibility to ensure that when the Government entrust them with a job they do it with great assiduity and care.
I was not satisfied with my right hon. Friend's statement on nominee directors. I am not satisfied with the Government's view. It is unacceptable to be told that if a nominee director feels that because of his allegiance to the company on whose board he sits he cannot communicate with the Department that appointed him, his only option is to resign. The situation is hopeless. I understand that there is to be a company law Bill in the next Session. Nominee directors appointed by the Government should have a direct line back to the Secretary of State. They should not have to worry about resigning or to feel that they are undermining their loyalty to the company they serve.

Mr. Michael Shersby: As a member of the Public Accounts Committee, I feel that there are a number of key questions to be answered, if the debate is to be meaningful and if the work of the Committee, in reporting to Parliament, is to be effective.
First, who is responsible for what the Committee describes as
one of the gravest cases of the misuse of public resources to have come before us for many years"?
Who was responsible for the fact that the United Kingdom taxpayer lost £77 million in four years? Who was responsible for the fact that $17·65 million went walkabout in November 1978?
I had hoped that the speech of the right hon. Member for Barnsley, Central (Mr. Mason) would have provided some answers to those questions. However, we were given only an aggressive, highly partisan political speech that was extremely disrespectful to the Chairman and members of the Public Accounts Committee and made no reference whatsoever to the contract with GPD Services and the loss of that money. The speech was nothing more than an attempt to whitewash the right hon. Gentleman's own period of office, to pass the blame on to others and to criticise the Public Accounts Committee. If the right hon. Gentleman is not satisfied with the chairmanship and the membership of the Committee, why has he not said so before?
The Committee is appointed by Parliament. Its members are nominated through channels of which all hon. Members are well aware. I believe that the Committee did a conscientious job, analysed all the evidence before it and produced a report that has been welcomed by almost everyone except the right hon. Gentleman. Therefore, I was not the slightest impressed by his speech. I think that it was wanting in every respect. I am only sorry that the right hon. Gentleman is not in his place to hear the remarks which I will feel obliged to make at the conclusion of my speech.
I was particularly glad to see the right hon. Gentleman in his place earlier in the debate, and to see my right hon. Friend the Member for Spelthorne (Sir H. Atkins) in his place. I had hoped that my right hon. Friend the Member for Spelthorne would contribute to the debate and explain to the House how during his term of office the various events to which the Committee of Public Accounts report refers came about. I am sorry that that has not happened.

Mr. Nicholas Winterton: He may not wish to say anything.

Mr. Shersby: I wish to place on record that, like many other members of the PAC, I recognise that the unemployment situation in Northern Ireland was and is severe, and that action was and is necessary to stimulate industrial development, but I do not believe that it justifies Ministers, civil servants and others taking reckless decisions which result in a substantial loss of public money. Hindsight is commonly called 20/20 vision and it is easy, people say, to be wise after the event.
Regrettable though those incidents were, I hope that all political parties in the House and all those who hold office in Northern Ireland or in any other Department of state or who aspire to hold office will read the report of the Committee and take the most careful note of the lessons which the PAC has spelt out.
I leave the House with some key questions. How did the Secretary of State for Northern Ireland in 1978 assess his man? What steps did he and his ministerial colleagues take to check the background of Mr. John Z. De Lorean? I believe that they took few, if any, steps. I believe that they were given the bum rush into this deplorable agreement with De Lorean, and that it was as a result of that that the swindle occurred.
Why were they rushed into an extraordinary agreement, which the right hon. Member for South Down (Mr. Powell) has aptly described as hair-raising, when it was known, and must have been known, that other countries had already rejected the concept of De Lorean establishing his automobile business in their countries? The Irish Republic I quote as one example. I do not believe, as my hon. Friend the Member for Scarborough (Sir M. Shaw) has said, that the old technique of saying, "Well, if you don't take it, Puerto Rico, Ireland or Detroit will have it, and perhaps a few other countries as well", is a good enough justification for a Government and 19 Ministers to have gone into this venture in the way that they did.
I want also to ask why the right hon. Member for Barnsley, Central and his hon. Friends and, indeed, my right hon. Friend the Member for Spelthorne—in fact, all those who were responsible in the Northern Ireland Department—did not appoint nominee directors to the board of DMCL who were of the calibre to stand up to De Lorean. It must surely have been evident to the then Secretary of State for Northern Ireland, to his ministerial colleagues and to their successors in office that they were dealing with a man who had a very strong personality and who would be very difficult to handle.
The nominee directors told us that it was the frequent practice of Mr. De Lorean to table documents at board meetings at the very last moment and to push them through with virtually no discussion. The nominee directors told us that the dates of board meetings were altered at short notice on frequent occasions. It was clear to any member of the Committee of Public Accounts questioning those witnesses that, with the best intention in the world, they would have a pretty difficult time in handling Mr. De Lorean or in forming considered judgments on the business of the company to the board of which they had been appointed to safeguard the public interest.
I share very much the views of my hon. Friend the Member for Northampton, South (Mr. Morris). I say to my hon. Friend the Member for Brent, North (Dr. Boyson) that I hope that he will ensure personally that for the future

it is made absolutely clear that any nominee director appointed to a company of this kind must have not only sufficient business experience to run an automobile company or any other business enterprise but sufficient experience to stand up to strong entrepreneurial personalities and be prepared to resign if the directors do not get proper treatment.
I remember asking one of the nominee directors what he did when he found himself faced with papers at the very last moment to which he was asked to give his approval, and what he did when dates of meetings were changed at the very last moment. To his credit, he complained vigorously about that, but I think that he will have been far more effective if he had resigned and had said publicly that he was not prepared to continue discharging his responsibility as a director of DMCL in the deplorable circumstances with which he was faced.

Mr. Nicholas Winterton: My hon. Friend is making a valuable contribution. Can he indicate to the House how he believes that the nominee directors apparently were able to agree very substantial bonuses to Mr. De Lorean and another director a few weeks before the company went into liquidation? It does not seem that they put up any fight. Does this show that they were perhaps doing their job, albeit under difficulty, or that they were just blatantly incompetent?

Mr. Shersby: I can only speculate on the reasons for that. I think that it was all part of the fact that the magnetic and powerful personality of Mr. De Lorean, coupled with the assent of the British Government to provide additional funds to take the company on yet a little further and a lack of adequate documentation, led to the directors and the nominee directors believing still that the company was being run by an automobile genius and a business genius who would in the end be successful in delivering what he said he would deliver and what the British Government believed he would be able to deliver.
I deplore the criticism of the Committee of Public Accounts and particularly of the Chairman by the right hon. Member for Barnsley, Central. I have known the right hon. Gentleman for many years, and I believe that his comments were unworthy of him and were a reflection of the aggressive and partisan stand which he took to defend his own curious and questionable position. It is not possible for the Chairman of the PAC himself to reply to such criticism. I should like to say—and I am sure that I say this on behalf of my fellow members of the Committee—that we have the utmost confidence in the Chairman and we believe that he has done a good job in producing a fair and reasonable report. I do not think it comes well from the Secretary of State who was in office at the time when these events occurred to criticise either the Chairman or the members of the PAC in the way that he did. I hope that, on reflection, he will feel that it would be wise to withdraw those remarks.
In my time in the House of Commons, serving on the Committee of Public Accounts has been one of the most worthwhile activities in which I have been engaged. The many months which we spent in trying to unravel the De Lorean affair led us all to the conclusion that we were dealing with a very unusual, special and difficult situation. I hope that the Secretaries of State of the two Governments which were in office in that period will have learnt from it. I am glad that the Government have accepted the report,


and I hope that in future we shall see the affairs of Government conducted more wisely and with a much closer regard to better business practice.

Mr. Stuart Bell: One of the disadvantages for the hon. Member who winds up on behalf of the Opposition is that he finds that his speech has been made for him several times over by those who have preceded him. President Johnson once said that if we all had the same facts, we would come to the same conclusions.
Reading through the 25th report of the Committee of Public Accounts and the memorandum published by the Northern Ireland Department of Finance and Personnel, and having heard the speeches, I think it is clear that there is a certain degree of consensus in the House tonight.
I listened with great care to the hon. Members for Uxbridge (Mr. Shersby) and for Northampton, South (Mr. Morris), and during my short intervention I shall possibly cover some of the points that they made.
The hon. Member for Uxbridge referred to the speech of my right hon. Friend the Member for Barnsley, Central (Mr. Mason), who was of course the Secretary of State for Northern Ireland for part of the time with which we are concerned. It was quite right and proper, therefore, that he should have sought to put into context and to explain the decisions that were made. The point has been made on both sides of the House that two Governments were involved in these decisions. As the hon. Member for Rutland and Melton (Mr. Latham) honestly pointed out, there were times under the Conservative Government from 1979 when these agreements could have been cancelled. But I do not feel that it would be appropriate to rake over the events of the last four years. I am the only Member taking part in this debate who has no fingerprints on this file, because I was not a Member of Parliament until 1983. I can therefore speak with the utmost objectivity, after a thorough reading of the report.
My right hon. Friend the Member for Mansfield (Mr. Concannon) also sought to set the matter in context when he said that the many successes that there have been in Northern Ireland would not have been possible if there had been a rigorous obstacle course as regards investment. The conclusion of the Public Accounts Committee was, as we have heard, that there ought not to be a hidebound bureaucracy intervening and preventing the kind of investment that is needed in Northern Ireland.
The right hon. Member for South Down (Mr. Powell), who has followed the entire debate, made a useful contribution, as he normally does, and sought to place the debate in an objective and sensible context. He talked of a political misjudgment, which he said was based on a misconception of cause and effect.
As I said earlier, the then Labour Government had a policy on these matters—the policy of the day. The Labour Government wished to devise an economic strategy for Northern Ireland based on the use of public investment. It desired a strategy based on the so-called Quigley report. We have not heard that report mentioned tonight, but my right hon. Friend the Member for Mansfield reminds me of it. The Quigley report argued that the public sector should take unprecedented risks to attract foreign investment to Northern Ireland.
There is no doubt that the De Lorean affair was an attempt to renew the economic base of Northern Ireland.

The right hon. Member for South Down—I almost called him my right hon. Friend, but, of course, I cannot do that—sought to distinguish the effects of unemployment in Northern Ireland from the long-term, difficult effects of the security situation—problems about which we all know and live with.
There was the belief that if we could create jobs in west Belfast and the west Belfast area—which, as mentioned earlier, has five times the unemployment that we have on the mainland—that would be a very useful effort.
Following the Labour Government, we had a Conservative Government who agreed to a loan of £14 million to cover the cost of the overrun that was becoming apparent at that time. On 21 January 1981 there was a further request for £10 million and, again in the interest of keeping the enterprise afloat, the Minister of State, Northern Ireland Office, agreed to provide Treasury guarantees up to £10 million. That, as we know, was increased to £17 million by 31 December 1981.
The hon. Member for Rutland and Melton—who made a very substantial contribution to the report and to the verbatim records, which I have read—honestly put his finger on the master agreement and said, if I understood him correctly, that it might have been tightened up at that time. There was that possibility, but, as he said, he was told that the Conservative Government had made clear their intention to support the De Lorean project and there was no intention of terminating their contracts with the company. Therefore, the same constraints as were on the Labour Government were on the Conservative Government. It does a great deal of credit to the Labour Goverment and to the Conservative Government, as well as to the civil servants and the trade representatives involved in these matters, that at all times they had the interests of the people of Northern Ireland at heart. No suggestion has ever been made of any pecuniary gain by anyone in any of these offices. That, too, is a credit to all those who have been involved in this saga.
My right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon), who was the Chairman of the Committee, referred to its long and difficult inquiry. I congratulate those who drafted the report, because they sought to disentangle the great difficulties facing the Committee and came up with something that was extremely coherent and cogent and which I followed with the utmost interest.
My right hon. Friend the Member for Ashton-under-Lyne and the hon. Member for Rutland and Melton mentioned the Fallon and Srodes book, but neither gave the title—"The rise and fall of a dream-maker." The hon. Member for Macclesfield (Mr. Winterton) told the House that Mr. De Lorean was about to write his memoirs. I presume the title will be "What happens when the dream comes true?" Certainly in his case the dream came true over a period of years, but that again is no reflection on Ministers, because a Minister cannot possibly make a decision on matters such as the GPD company, which, as we know, was a Panamanian company. Even in the PAC report it is sometimes referred to as a Swiss company——

Mr. Nicholas Winterton: Swiss-based.

Mr. Bell: Yes, but it is called a Swiss company in one part of the report. That shows the difficulties of dealing with a Swiss-based company with a Panamanian


background. Panama is a territorial tax haven. Shareholders in a Panamanian company are not known to the public and they pay no tax on their earnings. That was regrettable, but it was not known or noticed and it certainly did not fall within the context of the ministerial decision.
I wish to pay a tribute to the hon. Member for Macclesfield, who first brought to the attention of the public the malfeasance which was involved well after these arrangements had been concluded. He mentioned the abuse and misuse of public funds and was sufficiently honest to make accusations of dishonesty and duplicity and to say that Ministers had been incompetent and apathetic. I mention that because it takes a very courageous Member of Parliament, even in this House of Commons, to criticise his own Ministers, as well as others. It is a great indication of the robustness of our system that he could express his thoughts so loudly and coherently. I congratulate him on that.
A great deal has been said about Sir Kenneth Cork. He has been mentioned by the hon. Member for Northampton, South, among others, and by my right hon. Friend the Member for Ashton-under-Lyne. I had great experience of Sir Kenneth Cork in all the years that he was with Cork Gully. He has a great reputation as a receiver and is no stranger to the variety of ways and means by which even the most famous companies can undo themslves. In evidence which has been quoted in a different context but which it would be right to set in the context of this debate, as I am winding up for the Opposition, this is what Sir Kenneth Cork said of the overall transaction:
I personally believe that if this company had ben modestly run with a production of 7,500 cars and run in the way a business producing this limited quantity of cars and if the up-front money had not disappeared, there is a good chance that that business employing 1,200 or 1,400 might well be running today.
A great deal was made of the point about Lord Bruce-Gardyne, who during the last Parliament made several interventions on this subject. He is a financial man and writes financial columns for the Sunday Telegraph and is very up-to-date in these matters. In a short debate in the other place recently, he called the De Lorean affair "a lunatic adventure." I submit that there was nothing lunatic about its conception. The project was designed to bring work to west Belfast in the context of 1978 and it was supported by Labour and Conservative Governments. It has as its inspiration what must have been the most noble of motives—providing work for able-bodied men and women who were otherwise destined to spend their lives in the dole queues.
It is said that the 2,000 permanent jobs which were to have been created would have cost £17,953 per job or, as others have said, £18,400 per job. The figure quoted by the Northern Ireland Comptroller and Auditor-General was £18,909 per job. The fact remains that both Labour and Conservative Governments, over a four-year period, showed their commitment to the people of Northern Ireland, their concern for the future of those people, their desire to help those in the Catholic minority who were out of work and demonstrated that it is untrue to seek to give the impression that Labour and Tory Administrations do not care what happens in Northern Ireland.
The paths that led to the destruction of the enterprise were highlighted by the PAC, and it is hardly relevant for me to go over them tonight. Money was poured into a subsidiary company rather than into a holding company;

nominee directors, once appointed, were ineffective; and there was a lopsided shareholding between the agencies which provided the money and the gentlemen who were to provide the expertise.
It is interesting to note how civil servants appeared before the PAC to explain how it all came about. The PAC does not normally question Ministers. We still have the concept of ministerial responsibility, and nothing that has been said in this debate detracts from that. However, it is right in a matter such as this, with public money involved, that those who bore responsibility for advising successive Secretaries of State and other Ministers of the Crown should give their side of the story.
As I said, their motives cannot be impugned. None was activated by a sense of personal gain, all were concerned for the future of Northern Ireland and all sought to the best of their abilities to bring work to the people of that area. The same officials who negotiated the De Lorean contract negotiated six other new American investments which are currently providing 2,300 jobs, as my right hon. Friend the Member for Barnsley, Central pointed out. Those 2,300 jobs represent about 20 per cent. of all existing jobs in United States companies in Northern Ireland.
That fact must be put in the balance and we must discuss the matter in that context. We must never lose sight of the fact that public sector employment in Northern Ireland accounts for 45·8 per cent. of total employment. That does not mean that the conclusion of the PAC can or should lightly be brushed aside. The PAC report—this sums up the Opposition's point of view—said that
the De Lorean project represents one of the gravest cases of the misuse of public resources to come before us for many years.
The evidence garnered by the Committee disclosed what it described as
a shocking misappropriation of public and private money
and showed also that De Lorean's car company received about £77 million of United Kingdom taxpayers' money. As hon. Members have pointed out, most of that has been lost. It was gratifying to hear the Minister say that the Government would continue to seek to regain as much of that money as possible. When I was in Belfast on Monday night I was told that about £7·7 million had already been recovered. The Minister described it as £6 million in money and £1·8 million in assets, so the reports are not entirely dissimilar.
The report of the PAC and the events of the four years 1978 to 1982 have resulted in important changes being made in the method by which future projects will-be vetted for Northern Ireland and for projects relating to other Departments which handle public money. The Minister gave an assurance that that would be done.
The criteria for Northern Ireland have not changed because there is a desire to create work for the people in that area. The Industrial Development Board, in its evidence to the PAC, pointed out that there should not be over-excessive caution or too great a bureaucratic approach in the search for good investments which will yield jobs.
The lessons of De Lorean will, however, be with us for some years. The Minister said that those who ignored the lessons of history had to live through them all over again. Shakespeare wrote:
If to do were as easy as to know what were good to do, chapels had been churches, and poor men's cottages princes' palaces.


If we were able to relive our lives with the benefit of hindsight, I am sure that the first in the queue would be those Northern Irish representatives who had to deal with Mr. De Lorean.
Some good has come out of this sad story. As my hon. Friend the Member for Normanton (Mr. O'Brien) said, a factory was built on a green field site at Dunmurry, west of Belfast, and for a time it looked as though this high risk venture, as it was always called, would pay off. Even the consultants, McKinsey, thought that there might be consolidated profits of $30 million on $350 million to $400 million of sales. In fact, royalties of £600,000 after tax were received by NIDA in respect of 3,242 cars.
The employment target of 1,000 was met a year after the commencement of production and the five-year target of 2,000 jobs was met by August 1981. By January 1982, employment had reached 2,600, and a further 76 jobs were provided on site by canteen and security companies on contract. The annualised gross wages and salaries bill for the labour force of the De Lorean company was estimated at about £17 million, based on then current average earnings.
It is clear, therefore, that skills were learnt in a short time by a willing and eager work force who showed, if nothing else, that where there was a will there was a way, and that where there was an opportunity for work that opportunity would be quickly and effectively taken.
The recommendations of the PAC have been accepted by the Government, and we have had an interesting and lengthy discussion on the subject of nominee directors. I had imagined that the question of nominee directors had been resolved in 1957, at the time of the famous bank rate leak, when the Bank of England found itself in some difficulty, with two nominee directors sitting in on the setting of the bank rate and a leak occurred two days later. While that certainly cured the Bank of England in that respect, it has not cured any of our public bodies.
On the plus side of the De Lorean affair, cars were actually produced. In all, 8,333 were shipped to the United States and retailed by dealers. The investment, in substantial part, found its way back into the local economy and provided a respite, albeit short-lived, for those otherwise unemployed. While, therefore, there is a feeling of a total loss of perhaps £77 million, that has not entirely been the case. There were also lessons to be learnt for the future. Some of those lessons have already been accepted in Northern Ireland, with a consequent vesting of responsibility in the Industrial Development Board.
About £11·5 million was paid to Lotus, but that was not entirely lost to the local community and economy. I have a list with me—it is too long to read—of local industries in Northern Ireland, and some on the mainland, which benefited from the transaction.
Against that we must not lose sight of the fact that De Lorean managed to obtain a British Government investment of £76·92 million in grants, loans and guarantees, inclusive of share capital, against a modest contribution—the hon. Member for Macclesfield will note the figure—of £564,000. Whether that was authorised capital or actually paid up, we shall probably never know.
The next debate is about the coal industry. There was a slogan on the coal mining banners of old which read:
We take up the task, the burden and the lesson.
Placed in the context of De Lorean, the task must be and will remain our commitment to the people of Northern

Ireland, and for them the quest for jobs. The burden remains in seeking to urge the Industrial Development Board never to give up that quest. The lessons are that, while stringent rules and regulations can and must apply where public money is involved, everything must be done to prevent the likes of Mr. De Lorean from slipping through the net again. Not only did he deprive the taxpayer of his money, which was bad enough; he raised the expectations of ordinary people in Northern Ireland and then dashed them to the ground, with all, the disappointment that consequently flowed from that. If those lessons can be learnt, some good can come out of this sad affair.

Dr. Boyson: The hon. Member for Middlesbrough (Mr. Bell) said that his fingerprints were not on the story of De Lorean, whoever else may have had his fingerprints on it over the relevant period. I inherited my portfolio in September last year, so I cannot look back on the story from a great height. My hon. Friend the Minister of State, Home Office, the hon. Member for Pudsey (Mr. Shaw), has joined us. He has been away for most of the day and is delighted to be with us.
Much of the trouble is linked with unemployment. Risks have been taken in the past in Northern Ireland. The Public Accounts Committee has looked at the various problems and pointed out the lessons to be learnt from them. In west Belfast, unemployment was five limes higher than in greater Belfast, where unemployment was already much higher than in Great Britain. In those circumstances, people looked desperately for employment of any kind.
The Government accept totally the recommendations of the Public Accounts Committee in its reports. I pay tribute to the Chairman of the PAC, the right hon. Member for Ashton-under-Lyne (Mr. Sheldon), and the other members of the Committee. I also pay tribute to all the hon. Members who have spoken seriously and straightforwardly in the debate. Their labours have not been in vain. The reports have been studied; indeed, changes were made even before they were published. Being questioned about a problem helps one to assess it and to decide what needs to be done about it. It is clear that private money is needed as well as public money. It is also clear that projects must be assessed without the rush or urgency that was mentioned by several hon. Members, including my hon. Friends the Members for Scarborough (Sir M. Shaw), Rutland and Melton (Mr. Latham) and Northampton, South (Mr. Morris).
The best way for a con man to sell something is to rush the sale; there can be no doubt about that. Once negotiations have started, it is very difficult to withdraw from them. It is like the treacle well in "Alice in Wonderland". What is at the bottom of a treacle well? Treacle. Once one is in a treacle well, it is extremely difficult to get out of it. I think that my hon. Friend the Member for Macclesfield (Mr. Winterton) will agree with that. I call it the mangle procedure: if one gets one's fingers in the mangle, it turns only one way. One can go right through it or just lose one's fingers. People do not like losing their fingers. Once £14 million has been spent and another Government take office, they feel that they must get it back somehow or other.

Mr. Nicholas Winterton: The question that I directed through you, Mr. Deputy Speaker, to the right hon.


Member for Barnsley, Central (Mr. Mason)—who unfortunately is no longer in his place—was whether we could be told how much John De Lorean and his companies put up as their contribution to the setting up of the De Lorean company, to which was added a very hefty contribution from the British taxpayer.

Dr. Boyson: My hon. Friend the Member for Macclesfield has spoken today of events with which he has lived for a long time. I can give him the figures. The De Lorean company subscribed £546,000 for shares in De Lorean Motor Cars Ltd. There was no personal money from De Lorean in that sum.

Mr. Winterton: That is right.

Dr. Boyson: The money subscribed to the De Lorean Research Ltd. partnership—$50,000 from each person—made up a figure of $12·5 million. That was paid over for the development of the motor car, but again none of it came from Mr. De Lorean.
I repeat that we have accepted the 13 principles. I am surprised that I did not see Lord Bruce-Gardyne looking at us today from the skies. We shall have to see in the Sunday Telegraph what he says about the debate. Even he agreed that the 13 principles were a great advance on the previous position.
The right hon. Member for Barnsley, Central referred to the problem of unemployment. He sent me a note to say that he was unable to stay after 7 pm; that is why he is not in his place now. The Government's concern to create employment in Northern Ireland is no less than that of the previous Labour Government, and I acknowledge the kind and courteous way that that point was made by the hon. Member for Middlesbrough. I agree with him that it is no good raising expectations and then not fulfilling them.
The £77 million that was spent on De Lorean Motor Cars cannot be spent again. The loss of that investment did great harm to investment prospects in Northern Ireland for a considerable time. But it must be put on record that the failure of the De Lorean project was not the fault of the workers in Northern Ireland, who did a remarkable job.
Since 1979, when the Government took office, 30,274 jobs have been promoted by the Industrial Development Board and the Local Enterprise Development Unit. Those jobs have been promoted by encouraging businesses to come to Northern Ireland, and I have seen some of them. Therefore, the Government's concern is at least as great as that of any other Government.
If people do not learn the lessons of history, they live them again. The lessons are there to be seen; they are never identical, but they can be recognised. The PAC has shown how we can learn those lessons. As I said earlier, we wholly accept the PAC's reports, and I give the Chairman and members of the Committee full credit. If we learn those lessons, irrespective of party, I trust that no Government will in the future have to deal with a situation such as that created by De Lorean.
The expenditure of the money on De Lorean would not have been possible if there had been careful technical assessment of the project from the beginning. It would not have happened if the project had not been rushed, and if the 13 principles had been followed.
The whole House owes a great debt to the Public Accounts Committee. I pay particular tribute to its Chairman and to those members of the Committee who have spoken in the debate. The reports have been read carefully in Northern Ireland. They have guided us in what we have been doing. We accept all the main recommendations.
The question of nominee directors is important, My hon. Friend the Financial Secretary to the Treasury has been listening to the debate.
The time of the PAC and of the Members who have spoken in the debate today will not be wasted if we can ensure that in the future there are no more De Lorean failures and if we can at the same time get good private and public investment.

Question put and agreed to.

Resolved,

That this House takes note of the Twenty-Fifth Report from the Committee of Public Accounts in the last Session of Parliament on Financial Assistance to De Lorean Motor Cars Limited (House of Commons Paper No. 127 of Session 1983–84) and of the Northern Ireland Department of Finance and Personnel Memoranda on that Report (Cmnd. 9374 and House of Commons Paper No. 199 of Session 1984–85).

Orders of the Day — Coal Industry Bill

Order for Second Reading read.

The Secretary of State for Energy (Mr. Peter Walker): I beg to move, That the Bill be now read a Second time.
I should like to say a few words to the House on the background to the Bill. Obviously I greatly regret having to come to the House with a Bill requiring the expenditure of £1,800 million. If further orders are taken, it may be as much as £2 billion. I regret it because otherwise it would have been possible to come to the House with a far more favourable report about the state of the coal industry.
I believe that 1984 could have been a year of very considerable opportunity for the coal industry. Many firms were considering the possibility, with the aid of Government grants, of converting to coal as a form of energy. My Department looked at the energy efficiency campaign and decided that a sensible target would be to try to persuade 1,000 firms in Great Britain to convert to coal. It was a year in which about £700 million to £800 million of capital investment could have taken place in the industry which would have increased performance and productivity and the prospects for capturing further markets. It was also a year in which we hoped that substantial progress would be made by the industry in reaching a break-even position and that it would no longer be a substantial liability for taxpayers.
I believe that the House should examine carefully the realistic opportunities and the downside risks that are involved in the industry. We have coal reserves which can be sensibly and correctly exploited, and a coal mining machinery industry which is a world leader. It faces competition only from Germany. As Germany's coal industry will probably decline, we have the opportunity to become a dominant force in the world's coal mining machinery industry. Therefore, the prospects are very good.
However, considerable improvements in productivity must be achieved. If one endeavours to look impartially at the last 10 years in the industry, before any strike action took place, the "Plan for Coal" contained three ingredients, only one of which was fulfilled, and that was the agreement by the Government—in the first place a Labour Government, followed by a Conservative Government—to invest substantially in the industry.
I make no party political point when I say that capital investment by this Government in the industry in both real terms and cash terms has been greater than that achieved by the previous Labour Government. It has been greater than the capital investment envisaged in the "Plan for Coal". The proponents and creators of the scheme considered that if capital investment were to be made at that scale over that decade it would result in an improvement in productivity of 4 per cent. a year. That was never achieved. For the 10-year period the total improvement in productivity was similar to the target for each year of the plan.
If those who are employed in the industry and if those who want the industry to be successful and to expand in

the future are to have their hopes fulfilled, that will happen only if the industry uses the investment in it successfully and markets its products successfully. If it does so, I shall have great confidence in the industry. Therefore, I hope that trade unions and management will bear in mind that the best prospects for the industry lie in using the next two years during which this finance will be available to the best advantage of the industry, which means improving productivity and using the very substantial sums of money that are available to improve the performance of the industry.
The firm objective of the Government is that the National Coal Board must break even without deficit grant by 1987–88. That has been said in the past. Similar hopes have been expressed not only by Conservative Governments but by Labour Governments. It is absolutely essential for the industry to realise that, because of the sums of money involved, it is not possible for any Government, whether a Labour Government, a coalition Government or a Conservative Government, to continue to finance the industry at this level.

Mr. Anthony Beaumont-Dark: I am delighted to hear that this year the coal industry will at last make a profit. Since 1947 we have been promised that the coal industry would make a profit, yet each year—sometimes twice a year—we have written off thousands of millions of pounds here and hundreds of millions of pounds there. Does the Minister think that within the next three years there is any prospect of no taxpayers' money having to be put into the coal industry?

Mr. Walker: I should not have said what I have just said unless I believed that to be the position. It is in the interests of the miners and the mining communities to recognise that they are not being asked to make a great sacrifice but that they are being presented with an opportunity which will benefit them and the industry. It is essential for those who have in mind the best interests of the industry to recognise that fact.
Clause 1 provides for the payment of deficit grant to the National Coal Board—£1,200 million for 1984–85 and £600 million for 1985–86 and 1986–87 together. The latter figure may be increased, if necessary, to £800 million by order. Naturally I hope that no such need will arise. The provision of £1,200 million for 1984–85 is over and above the funds provided for that year under the Coal Industry Act 1983. We reached the limit on the deficit grant that we could pay in March; hence the immediate requirement for fresh parliamentary authority.
Total losses for 1984–85 are expected to exceed £2 billion, very largely due to the strike. The loss is still being added up, but at the last count no fewer than 71 coal faces—46 working faces and 25 salvage faces—had been lost, and 42—37 working faces and 5 salvage faces—were causing serious concern. The write-off of faces is costing millions of pounds. The recovery of faces, where recovery is possible, also costs many millions of pounds. Money is needed in the first instance not to make any real progress but to get the industry back to where it was.
Clause 1 also provides that, if the audited accounts of the NCB show that the full £1,200 million for 1984–85 is not required for that year, the balance may be carried over to 1985–86 and 1986–87. The reason is that it allows for


present uncertainty about the proper allocation of strike-related costs and their amounts to be resolved when the board's accounts for 1984–85 are available and have been agreed with the auditors.
The board must operate within a financial framework. The subsidies to the industry in the past have been intolerable. However, there is a commitment in the industry to work towards new objectives. It is that commitment which counts and it must have the support of all, with a will to succeed so that the industry can become successful and solvent.
There will, of course, be pit closures. Since the strike ended there have already been some closures of pits where the majority of miners connected with them agreed that there was no likelihood that those pits could survive. There will be closures where it is the judgment of the board—and, I hope, the judgment of the unions—that spending money on pits that will contribute nothing to the future prosperity of an area is a mistake, not just for the industry in its collective form, but for the miners and their communities.
Essential closures will take place, but there will be substantial investment. Alas, part of the investment that would have been made in new plant and machinery and new coal faces will have to be spent on restoring some existing faces.
It is essential for the industry to recognise that the substantial sums that will be available over the next two years should be spent wisely and sensibly on projects that have a future and will provide jobs and opportunities for years to come and are not wasted. Therefore, I hope that when considering the closure of pits the three unions involved will be objective about where the available money can best be spent.
New procedures were agreed in negotiations with NACODS during the dispute. The existing procedures will be applied and if the unions and the NCB disagree on the conclusions there will be an independent review—as agreed with NACODS—before the NCB makes its final decision. When there is clearly no case for money to be spent on one pit when it could be better spent for the industry elsewhere, I hope that miners will not believe that it will be in their interests not to join the management and the NCB in taking rational decisions on such matters.

Mr. Ray Powell: Are the new procedures operable in respect of the pit closures that have been recommended since the strike ended?

Mr. Walker: The form of the new procedures has not been agreed. Discussions are going on with the unions concerned. In the pits that have ceased to function since the dispute ended, the NCB has made clear to those affected the range of options available. It has said, "You can stay connected with the pit and the normal procedures will take place. If you take our view that there is no future for the pit and you would prefer to transfer now or to take voluntary redundancy, that can be done."
In a number of pits, the miners have decided to take that latter route. The procedures are still available. I believe that it is in the interests of miners and their communities to make such rational decisions. In Wales, NUM engineers went down a pit and agreed with the NCB that it had no future. The majority of miners also agreed. If the NCB had told miners that those options were not available and that

men would be stood off for four or five months while the procedures were operated and the new procedure was agreed to, the majority of miners in that pit would have suffered.
I hope that the miners will show common sense. The NCB will not impose decisions. It will not say, "We are closing this pit and to hell with the procedures." It will tell the miners what it believes will happen to a pit and will ask them how they believe that the situation should be handled. Amicable agreements have been reached in a number of cases.
I have been encouraged by the increasing activity of NCB (Enterprise) Ltd. which was launched during the dispute. It has already made loans and given advice and help on a number of projects. It has generated 200 new jobs in mining communities and hopes quickly to produce another 400 jobs. An additional 1,000 jobs look like being in the pipeline.
I am told by the NCB that it intends to widen the scope of the company by bringing in a number of outsiders to help with such activities. I increased the loan capital for the company from £5 million to £10 million, and if further activity and expansion is found necessary I shall be happy to review the situation.
Within the context of uneconomic pits having to close, as they have had to close throughout history, I believe in the potential for success of the new company. There is no doubt that the prospects for young people in an area where an uneconomic pit must close will be far better if new industries come into the locality than they will if the district is left with an uneconomic pit that will not have a very long life anyway. We shall continue to be active and to endeavour to do what we can.
With the seams available and investment that we are willing to make, there is a good potential future for coal. However, there will be competition from other fuels which coal will have to win, particularly in industrial markets. Even during the dispute—and with more authority since it ended—my Department and the Ministers who have attended all the briefings on energy efficiency that we have provided have brought to the attention of 15,000 industrialists the grants and potential involved in using coal. We have suggested that industrialists should carefully examine the possibility of using coal, but that prospect will be of no interest to industrialists until they are sure that there is a guarantee of supply and that the investment will produce coal at reasonable prices.
Clauses 2 and 3 concern the power to pay pit closure grants to the NCB and to make payments to redundant mineworkers. The Bill does not affect the generous redundancy terms currently available to miners set out in the Redundant Mineworkers and Concessionary Coal (Payments Schemes) Order 1984, as amended. Also the Bill does not extend the period for which those terms are available, which remains 30 March 1986 as specified in the 1984 order. The Bill does not increase existing ceilings on total payments that may be made in respect of redundant miners and concessionary coal or in respect of the pit closure grants; they remain at £1,200 million and £400 million respectively.
Rather, the purpose of the Bill is to ensure that adequate powers exist to enable the continuation of the redundant mineworkers and concessionary coal payments schemes and to bring the scheme for the payment of pit closure


grants into line with that proposed for the payment of deficit grants, and thereby avoid the need to burden Parliament with two coal industry Bills in one year.

Mr. Eric Cockeram: My right hon. Friend has explained that payments of £1·2 billion, perhaps increased to £2 billion, can be made under the deficit grants scheme. Can he confirm that the Bill also allows up to £450 million for pit closures and up to £1,200 million—which may be raised to a maximum of £1,800 million—under the redundant mineworkers and concessionary coal payments scheme? Therefore, the maximum finance permitted under the Bill exceeds £4 billion.

Mr. Walker: No. The bulk of what is implied in clauses 2 and 3 and the £400 million—which could be increased to £450 million—is provided for in earlier legislation. The Bill allows that facility to be extended for a further year. For that to happen, however, an order would have to be laid before the House.
Now that the strike is over, the NCB must undertake a thorough review of the damage done and the options for the future. Many faces have been lost. At some pits there is insufficient work available for all men to return to normal working, and those who wish to leave the industry are being allowed to take redundancy. At other pits, area directors are coming to the conclusion that continued operation can no longer be justified and have instituted proceedings under the procedures laid down, which may lead to the closure of those pits.
It is too early to say what the final outcome of the board's review will be. The setting of figures for the Bill, alas, could not wait for the board's detailed assessment of its likely future manpower requirements and of the extent to which men might be willing to leave the industry on the terms available. The figures, therefore, had to be large enough to meet any conceivable circumstance.
However, the Government accept that it would not be right to increase the existing limits until a clearer indication of need emerges. That is why the Bill enables the limits to be raised by order approved by Parliament if and when that appears necessary.

Mr. Dennis Skinner: It is a worthwhile investment.

Mr. Walker: The coal industry is of very important potential to the nation. The hon. Member for Bolsover (Mr. Skinner) refers to worthwhile investment. It is sad that the worthwhile investment of £800 million in capital investment did not take place last year. Instead, massive damage was done to the industry in a way that was entirely unnecessary and unwarranted and without any industrial purpose. As I said at the beginning of my speech, 1984 could have been a year of high investment, good pay, no compulsory redundancies and an increasing share of the nation's markets. Instead, it was the most tragic year in the history of the industry and I trust that it will never be repeated. I trust, too, that those working in the industry and all who wish it to succeed will take advantage of the Bill and will not waste and destroy the opportunities available.

Mr. Stanley Orme: As the Secretary of State said, the Bill gives us the opportunity to examine the financial arrangements proposed by the Government as well as the state of the industry following a dispute which

lasted for more than a year. It is a shame that the Government have not responded to the real issues facing the industry as quickly as they have produced the Bill, but I shall return to that later.
The Secretary of State referred to the NACODS agreement and the colliery review procedure. I want to put some specific points to the right hon. Gentleman and to ask him some equally specific questions. Since the end of the dispute, and even before then, the Secretary of State, the Prime Minister and others have repeatedly assured us that the agreement signed by NACODS and the NCB is sacrosanct. On 17 April this year the Secretary of State wrote to Peter McNestry, the national secretary of NACODS, assuring him yet again that the NCB would honour the agreement and welcoming the impending meeting of the unions and the NCB to give effect o that agreement. On Monday the Secretary of State looked forward to yesterday's meeting to establish a new colliery review procedure and expected a speedy agreement to be reached on the operation of the new procedure.
In the meantime, we were led to believe that the existing consultation and review procedures for pit closures would continue to operate, but the NCB apparently does not share the Secretary of State's view. Since the dispute ended, pits have been closed without any consultation.

Mr. Peter Walker: Give examples.

Mr. Orme: I was about to do so. If the Secretary of State will be patient, I shall tell the House about the closure of the Polkemmet pit in Scotland. I am sure that my hon. Friends will be interested to hear this, too. The Polkemmet pit is in the constituency of my hon. Friend the Member for Linlithgow (Mr. Dalyell). My hon Friend is unable to be present, but I have discussed the matter with him and with the Scottish secretary of NACODS, who tells me that the closure involves the loss of 1,400 jobs and a loss to the nation of 500,000 tonnes of coal per year, most of which is used by the Ravenscraig steelworks.
I hope that the Secretary of State will look into the details of this closure. I am informed that the power was switched off in that pit, leading to flooding, that valves were left open and that no attempt was made to recover the pit. [HON. MEMBERS: "Why?"] That is for the Secretary of State to answer.

Mr. Peter Walker: It was because the unions decided to withdraw safety cover.

Mr. Orme: That is not true. Safety cover was offered. The decision to close the pit in that way was taken by Mr. Wheeler, who urged people to take redundancy and then said that there was no one to take the jobs if the pit remained open. My hon. Friend the Member for Wentworth (Mr. Hardy), who speaks in the House for NACODS, can give chapter and verse on this. The agreement with NACODS was not honoured in this instance. That is a classic example of what has been happening since the dispute ended.

Mr. Peter Walker: If the right hon. Gentleman had consulted the NUM instead of just talking to someone from NACODS, he might have been told that all but 19 of the 1,400 people at that pit had agreed to transfer or voluntary redundancy. There was massive consultation, and the picture that the right hon. Gentleman paints is totally misleading.

Mr. Orme: That is not so. The procedure was not carried out. The Secretary of State cannot deny that when NACODS asked for the procedure to be used it was refused, and there was a letter from the NCB to that effect on 29 March. That is the reality of the matter.

Mr. Peter Walker: Is the right hon. Gentleman saying that instead of giving nearly 1,400 men the transfers and voluntary redundancies that they wanted we should have sent them home for four or five months while we waited for the procedures to be gone through against the wishes of the NUM?

Mr. Orme: I am saying that agreements should be carried out, but the Government are not carrying them out, and nor is the NCB.

Mr. Peter Hardy: When NACODS saw the NCB about the future of that colliery, after it had been prevented from sending men down to deal with the flooding, which could have been done without any objection from the NUM, it was given a firm assurance by the NCB that when the dispute was over the pit would be pumped clear. No consideration has been given at Hobart house to that clear promise made to my association.

Mr. Orme: My hon. Friend has made that point clearly in answer to the Secretary of State—[HON. MEMBERS: "Unfair."] It is not unfair—the point was clear.
The Secretary of State referred to negotiations continuing. At the meeting yesterday, a request for an assurance that no pits would close without going through either the modified or the existing review procedure was rejected by the NCB. NACODS is extremely bitter about that. Peter McNestry told me only this morning that he and his chairman threatened to walk out because the agreement which had been signed, which the Secretary of State said was sacrosanct, had not been implemented.
It is even more extraordinary that the NCB is apparently refusing to accept that the principle embodied in the existing procedure should be incorporated into the new procedure. That principle is that while a colliery is under review there should be no redundancies or transfers, and that the status quo should prevail. That has happened in the mining industry over a number of years, but it is not happening now.
Will the Secretary of State, or the Under-Secretary, confirm that until the modified review procedure is set up the existing procedure will operate? Will they give an assurance that any pit which the NCB seeks to close will be subject to the existing or new procedures and that there will be no redundancies or transfers while the proposed closure is subject to the review procedure?

Mr. Peter Walker: If the NCB offers to go through the present review procedures, but the majority of the miners at a mine decide that they want action because the mine has no future, does the right hon. Gentleman suggest that we should ignore their views?

Mr. Orme: The procedure must be carried out and consultations should take place with the three unions concerned. The three unions were not consulted——

Mr. Peter Walker: I want to clarify this point. If the NUM at a pit in Wales wants its miners to be given transfers or voluntary redundancies, and that is wanted by the majority of those working at the pit, is the right hon. Gentleman suggesting that the NCB should refuse that?

Mr. Orme: The NUM agreed to sign the NACODS agreement, but the Government refused to allow that—[HON. MEMBERS: "Answer the question."] I am answering the question. The procedure has been violated. I accept that the Secretary of State meant what he said about the agreement being sacrosanct, but he has been kidded by the NCB.

Mr. Kevin Barron: Does my right hon. Friend not find it strange that the Secretary of State is talking about the wishes of the majority of NUM members at one pit, when he ignored the wishes of the majority of NUM members who were on strike for 12 months? The right hon. Gentleman talks about ballots. Have the pits to which he referred held a ballot?

Mr. Orme: I take my hon. Friend's point. I did not want to make the point about the NUM and NACODS. The fact is that the three unions involved were present yesterday. Both the NUM and NACODS are dissatisfied with the attitude of the NCB and the failure to carry out agreements——

Mr. Allen McKay: The Secretary of State is terribly confused about the review procedure. Rockingham colliery in my constituency went through the review procedure. During that procedure the men at the pit decided that the colliery would close and that they would either be made redundant or transferred to another pit, but that did not stop the review procedure taking place, nor did it stop those concerned accepting the view of the men.

Mr. Orme: I take my hon. Friend's point. The problems that exist, not only at Polkemmet but at many other pits, arise because there was no signed agreement to end the strike. Therefore, no agreement can take place against the background of the authority of an agreement. The Government and the NCB did not want an agreement, and that is the problem which the industry now faces. The Secretary of State did not face the realities of the position, nor did he face the facts put forward at the talks yesterday.
I deal now with the Bill—[Interruption.] We are talking about £2,000 million. We are talking about paying for redundancies and pit closures. I make no apology for my remarks in the debate. On the surface the Bill appears merely to extend the provisions of existing legislation, but a closer look at the possible intent and effects of the Bill gives us a clear idea of the Government's plan for the coal industry. The Bill adds £600 million to the redundancy scheme, making a total of £1,800 million. Nearly £615 million is already accounted for, but that still leaves more than £1,150 million. It is not unreasonable to assume that those figures have been arrived at by a projection of the number of people the Government hope will leave the industry. I calculate that that will involve the shedding of another 50,000 jobs at least, and possibly many more. An even more dramatic contraction can be envisaged by an examination of the finanial targets set by the NCB. To reach them, the NCB would expect to cut £650 million from its wages bill. That is the equivalent of about 65,000 jobs.
Further evidence that the Bill is designed to facilitate a rapid contraction of the coal industry is contained in the expected levels of capacity. The Secretary of State referred to the possibility of closures. The Government and the NCB have decided that during the next five years


production should level out at about 100 million tonnes a year. From where will come the 130 million tonnes about which the Secretary of State spoke during the dispute? During the next five years, 25 million tonnes of new capacity will be introduced. Therefore, it is not illogical to assume that during the next five years 25 million tonnes of existing capacity will have to be shed.
The NCB has judged that 9 million tonnes of that will be from exhausted pits. What about the remainder? We are entitled to know the policy of the Government and the NCB and whether closures and redundancies will take place. On a straight profits-per-tonne analysis, the NCB could lose about 25 million tonnes by closing 69 pits, involving 67,000 jobs. We heard that argument during the dispute. Of course, the new capacity coming on stream will offset some of that, but Selby—which will produce about half of the new capacity—will involve only 3,500 jobs.
As if that were not enough, we have to face the EC plans, which were leaked to a German news agency. I have a copy of the memorandum but the House will recall that on Monday the Secretary of State implied that the leak had no basis. I welcomed what the right hon. Gentleman had to say and I have read carefully the report of what he said. He told us that he would wait to see what the Commission came forward with, but the memorandum tells us that the plans envisage a 15 per cent. reduction in the European coal industry, which will affect, basically, the two major producers, which are Britain and Germany. It appears that EC documents project job losses throughout Europe as a result of the reduction. Britain could easily lose between 60,000 and 70,000 jobs. It seems that it is proposed to lift import restrictions to make way for the importation of South African or Colombian coal into the United Kingdom. It is proposed also to eliminate all subsidies for the coal industry by 1987.
The Secretary of State told the House on Monday that as yet there were no definite Commission proposals. I hope that during his discussions at the Council of Ministers next month he will support the British coal industry by rejecting the proposals set out in the memorandum to which I have referred. I hope that, if necessary Britain will use the veto. We cannot have countries with no indigenous coal production dictating to Britain what it should do with its own resources.
It seems that plans and projections for the coal industry have been formulated by the Government and/or the National Coal Board and that no one has been told about them, least of all right hon. and hon. Members of this place. The Secretary of State has said that the coal board is making an assessment and has suggested that it is a comparatively short time since the miners' dispute came to an end. As soon as the assessment has been completed, the House is entitled to know the projections on which it is based and to debate it.
What are the coal board's plans? What size of industry is it aiming at? What is the estimated level of manpower and where will production be concentrated? Over the past 12 months the Opposition have made many speeches on the cost of pit closures to the nation and to communities. I do not intend fully to rehearse those arguments this evening, but it remains the case that the nation gains more if miners are kept in jobs than if pits are closed and jobs are lost. At a time of mass unemployment, the resources of the coal industry will not be used to create wealth for the nation elsewhere. They will remain idle, and nothing

will be gained from that. Instead of the Government taking a negative view of the coal industry and thinking in terms of cuts, closures and redundancies, their time would be better spent seeking new markets for coal and expanding existing markets. If that were their approach, there would be even less justification for pit closures.
The Government should be seeking the expansion of the industrial market through the coal-firing scheme, which could provide a market for an estimated 6 million tonnes over five years. I hope that the Minister will confirm that the scheme will continue. Important areas of expansion for coal in the public sector are schools, hospitals, Government buildings and local authority buildings. If those areas were eligible for grants under the coal-firing scheme, there would be the possibility of a market for another 5 million tonnes. The promotion of the export market, especially in Europe, would similarly negate the need for pit closures.
Sulphur content limits have been set in some European countries, such as Italy and Sweden. Scottish and Welsh coal is low in sulphur content, and it should be promoted and marketed.
I met—probably the Secretary of State did too—Israel's Minister of Energy, who visited Britain a few weeks ago. He told me that he wanted to start to buy deep-mined British coal once more. Israel has the world market at its disposal, and I asked him why he wanted our coal. He told me that it was the best coal and, from Israel's point of view, the most economic.

Mr. Peter Walker: I, too, saw Israel's Minister of Energy. Did the right hon. Gentleman ask him what price Israel would be willing to pay for our deep-mined coal?

Mr. Orme: The Minister told me that the price was economic in Israel's terms.

Mr. Peter Walker: Did he tell the right hon. Gentleman how much Israel would be prepared to pay for it?

Mr. Orme: The Minister would have to negotiate with the coal board and the Government. He told me that he was here seriously to buy coal. He told me that our deep-mined coal was among the best of its sort and was still one of the most economic coals in the world.

Mr. Skinner: Perhaps I have a more adequate answer for the Secretary of State. Perhaps my right hon. Friend should tell him that British coal is much cheaper than Slater-Walker was to British taxpayers. They had to bail it out for £110 million, when the right hon. Gentleman and his friends had been making money out of it hand over fist for many years.

Mr. Orme: I take my hon. Friend's point. If the market for coal were expanded by 15 million tonnes, pits would have to remain open to satisfy demand. The Opposition advocate that the Government should have a wholehearted commitment to gasification, liquefaction and combined heat and power. They should direct themselves to coal-burning power stations instead of turning their minds to the PWR system.
Finally, I shall deal with industrial relations. Over 700 miners have been sacked by the coal board. Reasons for dismissal have varied from area to area and there is no pattern or consistency. When Scotland is compared with South Wales and other areas, it is clear that there is an unevenness in re-employment and reinstatement. There


must be direct negotiations between the various unions and the coal board, but they have not taken place. Why is it that not one of the 200 miners in Scotland—all those deemed guilty of some industrial misconduct or charged in the courts—has been reinstated?
The branch secretary of one of Scotland's largest pits was dismissed on 11 September 1984. On 27 November he was tried at the Edinburgh sheriff court on a charge of having assembled with others inside the gates of Bilston Glen colliery and having refused to move when requested to do so by the police. He was charged with having committed a breach of the peace, but the charge was found not proven. What right does the coal board have to instigate its own form of justice when the courts have decided that the case is not proven? I am aware that my hon. Friend the Member for Ogmore (Mr. Powell) can give other examples.

Mr. William Cash: Did the branch secretary concerned take the case to the industrial tribunal on the ground of unfair dismissal? Does the right hon. Gentleman have any information about that?

Mr. Orme: Industrial tribunals do not have the right to reinstate those who have been dismissed. They can recommend reinstatement, but they cannot order it to take place.

Mr. Peter Walker: That is the effect of Labour legislation.

Mr. Orme: I know that a Labour Government introduced that legislation. If someone goes to an industrial tribunal and wins his case, he may receive some compensation, but he will be finished with mining for the rest of his life. Why should the coal board institute its own procedures when someone has been before the courts and his case has been found not proven?
It appears that Mr. MacGregor would like to introduce American-style industrial relations and mining techniques into our coal industry. Recently he wrote an article about mining practices in Mining Engineer, which is a professional journal in America, and NACODS fears that the NCB plans to introduce American methods into the deputies' areas of work, to reduce manning levels underground and to cut statutory safety standards. Will the Secretary of State assure us that present safety standards will be maintained? We are entitled to know.
The Secretary of State talked about co-operation. We want co-operation in an expanding industry, which will involve the Government as well as management and the unions. Britain urgently needs a coherent energy policy, not a mass of redundancies and privatisations. The coal industry today is a sad spectacle. The Government should set up a tripartite meeting to consider a new plan for the coal industry, to solve the crisis in industrial relations and to set the industry back on the road to growth.
We give the Government notice that we shall not stand idly by if pits are closed and there are massive redundancies. That is not the future of the industry. We believe in an expanding and developing industry.

Mr. Andy Stewart: Tonight my right hon. Friend the Secretary of State for Energy unveiled the latest chapter in the coal industry's need for money. I welcome

his statement and endorse his commitment to the long-term prosperity of those who work in the industry. Again, this illustrates and supports the evidence which is available for all to see that the Government, more than any other, have supported the coal industry and will continue to do so. For example, if we compare capital investment between 1983 and 1986, the United Kingdom spent £3,000 million, Germany spent £800 million and France spent £150 million. The figures speak for themselves.
During a debate on the Coal Industry Bill on 15 November 1983, my right hon. Friend the Secretary of State said:
I do not envisage the board's need for support ending after two years, but it will be timely when new provisions are laid before this House in two years' time for the Government and the House to review the board's progress up to that point.
—[Official Report, 15 November 1983; Vol. 48, c. 737.]
It is only 18 months since then, and the progress of the industry, solely because of the machinations of Arthur Scargill, can be described only as an unmitigated disaster for the miners and the country in general.
No one in his right mind could have predicted the events of the past 18 months, yet one man was busy putting the final touches to his attack on the democratic process of his union so that his desire for the downfall of the Thatcher Government could come to fruition. If proof of that were needed, it was in the movement of his union's funds three days before he instructed the Yorkshire area of the union to confront the board at Cortonwood, and also in the speed with which he organised and dispatched his hordes of bully boys to the areas that defied him. He makes Genghis Khan look almost like a saint.
Has the president of the NUM, in the interests of the industry, his members and job opportunities for the unemployed, decided to co-operate with the board? So far there is evidence only to the contrary. A Marxist entrusted with a mission that fails is more dangerous when given a second chance. His new orders, which he received on a recent visit to Moscow, have been published. They are completely to rewrite his union's rule book, which will enable the red army to march again. It was probably just a coincidence that that happened at the moment when an Opposition Front-Bench spokesman announced in the House that they would rescind the laws on union democracy enacted by this Government. If that happened, it would deny trade unionists the right to hold ballots, an example of which is the ballot that Nottinghamshire miners will hold soon to oppose the proposed changes in the national rule book.
What the coal industry requires for a successful future is the confidence of its work force and of its customers. Without both, the £2 billion expenditure being approved tonight will be but a drop down the pit shaft. The confidence and morale of the men can be assured by the board's investing in new pits, and the announcement of a new pit would nail the lie that the coal industry is on the way out. For those miners who put the industry before Scargill's politics, that would be the bonus of loyalty about which everyone spoke during the dispute. The sum that we are talking about tonight would be equivalent to the opening of five new pits with a combined output of 10 million tonnes of coal, at a cost of £25 a tonne, and the creation of 5,000 jobs.
I wish to draw my right hon. Friend's attention to what is happening in the Nottinghamshire coalfield——

Mr. John Home Robertson: Albert Wheeler, and they can have him.

Mr. Stewart: As a result of the harassment of miners and their families, miners from all the English and Welsh coalfields, but especially from south Yorkshire, are transferring to Nottinghamshire pits. It is difficult to establish the total, but informed sources put the figure at 500—or 501 if we count Albert Wheeler.
That influx of highly regarded miners has raised some unanswered questions. The principal one is: what about the need and right of Nottinghamshire miners' sons to jobs in the Nottinghamshire coalfield? To defuse what could become an untenable position, the NCB should announce a starting date for the new Witham project, which is situated on the east side of Nottinghamshire, next to three 2,000 MW power stations. That would create substantial savings in the transportation of coal to the power stations and completely absorb the new arrivals.
The generous voluntary redundancy scheme, which will be extended to 29 March 1987, is welcome; but to overcome the uncertainty beyond that period, talks on a permanent formula for early retirement at 55 based on the number of years' service should begin. Without that, many highly skilled miners will opt to leave the industry before the end of March 1987 to take advantage of the present scheme.
The confidence that industrialists require from the NCB is continuity of supply at a price which makes their products competitive. The example of ICI's faith in converting its boilers to coal-fired is one that many should follow. The commitment given by the Secretary of State to support the conversion programme should also stimulate companies in that direction.
Efficient coal production starts with management, and the board's decision to streamline the administrative areas and to bring its operational and technical services personnel to Nottinghamshire is only a start. Those who run the industry should be seen in the coalfields, and the transfer of all but a few from Hobart house to the various areas would bring renewed confidence to those who mine the coal. They could then see that decision-makers are human beings, too.
The coal industry has just weathered a disastrous storm and the taxpayers are putting up a further £2,000 million to meet the expected revenue deficits for this year and the two following years. In the interests of those who support the industry, let us hope that common sense and purpose will prevail among those who work in and run the coal industry before there is a strike by taxpayers.

Mr. Michael Foot: One reason why a debate on the coal industry at this time is so important is that what happens in the few weeks after the end of a strike may be even more important than what occurred in the strike itself. The bitterness that can be created in the period after the ending of a strike may have its repercussions for years to come. That is partly what we are debating.
It is evident from the debate that my right hon. Friend the Member for Salford, East (Mr. Orme), who showed an acute awareness of what was happening in the coalfields during the dispute, seems to have much greater awareness of what is now happening on the ground—or even above the ground and underground—than the Minister. However, that is not exactly a novelty.
Some of us can recall what happened after the 1926 strike. The cold vindictiveness shown after that strike left traces in the industry for a much longer period and was felt even more than what had occurred in the six months of the strike itself. Eventually the trade union movement earned out the pledge that it gave at the time, that it would remove the vindictive legislation and the action taken by the Government. Just as those vindictive measures had to be overcome, although it took a long time, so the same will happen now. It may take a long time, but the Government should begin to understand the mood in the coalfields
At a party meeting a few weeks ago a remarkable speech was made by my right hon. Friend the Member for Wakefield (Mr. Harrison), who gave an account of what had happened after the 1926 strike and of what people had sacrificed then. He quoted the case of Bill Blyton, now Lord Blyton, who was a respected Member of the House for many years. He still plays his part in guiding these affairs. The general strike left Bill Blyton with debts that took 20 years to pay off. Before the strike, as a miners' union official, he had been one of the guardians of the old poor law assistance, but during the strike he and his wife, who died in 1971, had to apply to the guardians for help. He had to pay back sixpence a week over 20 years. When he became a Member of Parliament in 1945, he received a letter from South Shields telling him that he still owed £7 2s 6d, so for the first time in his life he sat down and wrote a cheque. Such was the legacy of the 1926 strike.
In the mining communities today there are multitudes of families bearing heavy burdens. It is the duty not only of the Labour movement and the trade union movement to come to their aid, but of the Government to do everything in their power to change the atmosphere in which these matters have to be dealt with.
I know that when I say what I am about to say there may be problems and some people may say that it is counterproductive to mention it, but it has to be said. I do not believe that Mr. Ian MacGregor is fitted to do the job of chairman of the coal board.

Mr. Ray Powell: He never was.

Mr. Foot: Indeed. This is not hindsight. Some of us remember what happened in the steel industry, when we bitterly protested against the appointment of Mr. MacGregor, and particularly the absurd financial terms that were arranged. We bitterly protested because it was an insult not only to the workers but to the managers in the steel industry. There were plenty of managers in the steel industry who were capable of doing that job. Instead of that, MacGregor was brought over from America and put into the job at huge cost. Far from his contributing to great advantage, all that he did was to cut and cut. When he carried out wise measures, they were mostly measures that had been arranged by previous managers.
I wrote to the Minister at the time, so anxious was I to avoid what might occur under MacGregor-type management. I urged that somebody else be appointed. There were quite a few others who supported the Conservative party who could have been put into the job. However, the Government would not accept that advice.
During his time in the steel industry, Mr. MacGregor quarrelled with Mr. Bill Sirs, just as strongly as he did with Mr. Arthur Scargill. The bitterness in the steel industry and among the steelworkers about the way in which MacGregor went about his task still rankles in every steel


area in the country. After that, for Mr. MacGregor to be transferred to the coal industry was a monstrous act by the Prime Minister. I imagine that it was imposed on the Ministers in charge. I do not suppose that any of them was in favour of it happening, and certainly the coal board was not.
What has happened since? A large part of the responsibility for what has happened during this terrifying year rests directly at the door of Mr. MacGregor. The whole of that catastrophic strike could have been avoided. My hon. Friend the Member for Wentworth (Mr. Hardy), who represents Cortonwood in the House, and who represented it so well throughout the bitter dispute, has given chapter and verse of how it could have been dealt with differently if the coal board had wanted it or even if the procedures prevailing in other coalfields such as south Wales had been applied in Yorkshire. All of it could have been avoided. But MacGregor was appointed to have a fight, and he thought that he would win it much more easily.
What did Mr. MacGregor say during the strike? Whenever there was the possibility of a sane arrangement or an understanding that could be sensibly reached, he would make a statement that wrecked the possibilities. I remember when he said, "We shall have a new system of management in the coal board. We must re-establish the power of management in the board." That was an insult not merely to those who had been negotiating with the management in the previous period, but to the managers themselves, including Sir Derek Ezra. Almost every utterance that MacGregor made about the way in which the industry had been run before was an insult to Ezra and the way in which he had done it. But Ezra was devoted to the industry and showed much more sense about the way in which it should be run.

Mr. Cash: Having spoken about the vindictiveness of the Government and the way in which Mr. MacGregor has behaved, will the right hon. Gentleman explain why, under the Labour Government, when he was a Minister, no redundant miner under the age of 50 received any capital payments, whereas under the present Government, whom the right hon. Gentleman has so heavily criticised, a 49-year-old miner with 33 years' service is eligible for redundancy pay of £36,000?

Mr. Foot: If the hon. Gentleman paid a little more attention to these matters, he might learn a little more.
I accept full responsibility for everything that was done. We settled such disputes by intelligent discussion with the trade unions, and in that way this dispute could have been avoided. My hon. Friend the Member for Midlothian (Mr. Eadie) was tireless in his efforts all over the country to ensure that the agreements made under the "Plan for Coal" were properly and faithfully carried out. But MacGregor said, "The 'Plan for Coal' does not mean anything. It has been cooked up by a lot of civil servants who did not understand what they were doing." Many Ministers and miners understood what they were doing. On the basis of those agreements, we were able to proceed to expand the industry, with a good future for it. If those agreements had been faithfully carried out, we could have avoided the dispute.
Mr. MacGregor's attitude to the steel and coal industries seemed to be, "I'm not bound by anything that

may have been done by my predecessors. I have been put in here to do a special job, and whatever the British Steel Corporation or the National Coal Board may have agreed before, that is not my business." Of course, one cannot conduct great industries in Britain like that. One may be able to do it in some outlandish parts of the United States, but it cannot be done here.
It was not only the managers of the industry with whom MacGregor quarrelled. We should discuss in the debate what has happened in the coal board. It has been in chaos for much of this period——

The Parliamentary Under-Secretary of State for Energy (Mr. David Hunt): indicated dissent.

Mr. Foot: The Minister shakes his head. He had better talk to Mr. Ned Smith or Mr. Geoffrey Kirk, who know much more about the coal industry than he does. They devoted their working lives to the industry, but they found that the method that MacGregor was using was so intolerable that they were forced to leave or be slung out. Either way, it was bad enough.
After the strike, in an interview with Mr. MacGregor, Mr. Graham Turner, a reputable reporter, who I imagine is a supporter of the Conservative party, asked:
in the long battle with the NUM, who had been tougher, himself or Mr. Peter Walker, the Energy Secretary?
Mr. MacGregor answered, according to the article,
'Why do you mention him? … Mr. Walker had nothing to do with it. All the decisions were taken here, in this room'. He looked to Cowan for confirmation. 'I certainly don't remember anybody else being consulted', agreed Cowan.
Is that the truth? I do not believe that it is. I have always believed that the Government intervened in the dispute. For a few weeks the Prime Minister said that there was no Government intervention, but we all knew that to be false. Government intervention was exposed and everyone knew that the Government were meeting every week and almost every day to discuss strategy.
Mr. MacGregor wanted to establish some authority. He claimed that every decision was taken by him and Mr. Cowan and that the Government had nothing to do with the dispute. I do not expect Ministers to accept that.
I am sure that the Minister could say something much more insulting about Mr. MacGregor than I have dared to say because the Secretary of State was told by Mr. MacGregor to clear off. He told the Secretary of State, "We don't need you. We have done it our way." Perhaps he did everything his way and perhaps that was why everything was so catastrophic.
To do the Minister credit, I believe that if Mr. MacGregor had not been there, or if he had had the guts to go to No. 10 and say, "We must get rid of this fellow because he is causing such trouble to the country and the industry", he could have saved a whole heap of trouble. If he had done that, a proper negotiated settlement could have been achieved earlier.
Either the story about Mr. MacGregor's relationship with the Ministry is true or it is untrue. If it is true, it is a gross reflection on the way in which the Government have dealt with a great national industry at a time of crisis. The Government have a right and a duty to instruct a board of that nature when it is engaged in such a dispute, particularly when the board is so incapable of conducting industrial relations on an intelligent basis.
It is possible that the Government did not intervene and that the story is true. The other possibility is that Mr. MacGregor is telling a complete falsehood and that the


Minister intervened by choosing sometimes to accept advice and sometimes to brush it aside. What a way to run an industry. What a way to deal with an industrial dispute. It is intolerable that the dispute should have been conducted in that way. We now have to clear up the consequences and to deal with all the individual disputes.
Most coalfields are now involved in disputes about civil liberties. People have been treated differently in different parts of the country. All the difficulties have been dealt with in different ways in different pits.
I do not wish to take away the power of the managers in the pits because they are capable of bringing some intelligence back to the industry, but when regional managers start to make intelligent attempts to solve the problems created in the aftermath of the dispute Mr. MacGregor says, "No. You cannot do that. If you do, you will be pushed somewhere else and will not be promoted like Mr. Wheeler." I know that some terrible things have happened in Nottinghamshire, but no one deserves Wheeler whatever they have done.
I hope that the Government will pluck up the courage to say how grossly mismanaged industrial relations have been in the industry. The Minister should ensure that the problems are dealt with, in the interests not only of the country but of the proper civilised treatment of great communities in our country. The mining communities must not be destroyed.
One of the ways in which the Secretary of State says that he will solve the problem is by encouraging new enterprises. The irony is wonderful because the Labour Government set up such an organisation to operate in the steel areas. We set it up on a proper basis. Ebbw Vale received more money than the Government now propose for the whole coal industry. That area needed every penny. Today that sum is chickenfeed. Over three or four years the area received about £15 million and then another £15 million. In addition, there was new investment. If £60 million or £70 million had not been invested in the tinplate industry, that industry would have been wiped out. In those difficult years we introduced an expanding investment system. We cannot operate on a tuppenny-ha'penny basis.
Investment in the steel industry has brought great benefit. New industries would have been impossible without the expertise, money and financial support of the British Steel Corporation. That process was begun by discussions with Mr. MacGregor's predecessors. When Mr. MacGregor joined the British Steel Corporation, he said that the industry had to be run down and that we should leave it to the Government. He said that the Government should put up the money. He said that the steel corporation could not be engaged in such activity. To anyone who says that Mr. MacGregor will clear up the mess I can point only to experience.
The Government must take back the £5 million or £10 million and introduce a scheme that will bring a whole range of new industries to the coal mining areas. They must ensure that the rundown of the pits that must go in the end is done at a proper pace when the whole apparatus is in working order. That is the way to do the job. That is what the Government should be saying they are doing today.

Mr. Eric Cockeram: We are assembled to go through a depressingly familiar ritual which occurs

each year. We hear from the Government Front Bench how the problems of the coal industry are exceptional this year and that exceptional measures are required. We hear how the current measure will last for the next two or three years. We hear that at the end of that period it is hoped that the NCB will be able to balance its books.
From the Opposition Benches, we hear a series of depressingly familiar speeches year after year. The Opposition resist rationalisation in the industry. They resist the attempt to make the industry financially viable. Year after year, they defend the past and seek to maintain the status quo.
The House is apparently expected to accept the same thing year after year. I do not intend to go back over the past, but perhaps we should dwell for a moment on what has happened merely since the general election. In November 1983 we were asked to sanction a sum of £650 million for deficit and social grants for that year. Incidentally, that sum was equal to £50 a week for each person employed in the coal industry. At 1983 rates, that sum approached half the average weekly wage in the industry. That money was paid through subsidy by taxpayers, the majority of whom earned less than those whom they were subsidising.
In November 1983, a little less than 18 months ago, the Government told us that the NCB's estimated loss for the year would be £200 million. That did not last very long. Practically a year to the day later, 26 November 1984, we undertook the ritual once again, except that the figures had altered. We were told that the deficit could not exceed £1·2 billion and might perhaps by order be allowed to rise to £2 billion. We were told that that amount would last some considerable time.
In May 1985 we are going through the ritual again. This time, the figure is £2·6 billion. The figure had doubled in 1984 and doubled again in 1985. There has been a fourfold increase since the general election.
These are massive sums of money. Let us try to put them in perspective. They represent a forced tax of over £110 a year on every worker in the country—or, in other words, over £2 a week in extra taxation. What we are being asked to sanction tonight is that every worker should pay to subsidise those in the coal industry, who earn higher than average wages. Those on lower incomes are being asked to subsidise them.

Mr. George Foulkes: The figures that the hon. Gentleman gives are relatively small when compared with the subsidies that are forced out of us for the farmers, who are substantially richer than the people to whom the hon. Gentleman refers——

Mr. Home Robertson: Steady on.

Mr. Foulkes: I include my hon. Friend the Member for East Lothian (Mr. Home Robertson).
With the one notable exception of my hon. Friend, many of the farmers who receive substantial amounts from the taxpayer are represented on the Government Benches and, indeed, in the Cabinet. Why is the hon. Gentleman so selective? Why does he deal only with a subsidy to the coal industry, when subsidies to the farmers, many of whom are millionaires, are much greater?

Mr. Cockeram: The House is not being asked tonight—[HON. MEMBERS: "Oh."] I would be called to order if


I responded to the hon. Gentleman's question. The House is being asked to approve a massive sum for the coal industry. It is interesting that the Opposition regard that as a relatively insignificant sum. [Interruption.] The hon. Gentleman used words to that effect. We shall have to read Hansard tomorrow.
The extra tax of £2 a week on every worker in the country to subsidise the coal industry workers is having to be paid by all those trade unionists who refused to support the mine workers in their strike. The electricity workers, the steel workers and a host of other workers refused to come out in support of the mineworkers, yet tonight the House is being asked to tax those people who refused to support the mineworkers by a compulsory levy of £2 per week.

Mr. Hardy: The hon. Gentleman is regaling the House with statistics. Part of this large and important sum of money is to help meet the cost of the miners' strike. I have worked out that the cost of the miners' strike, according to the Government's figure of £6,500 million, is £32,500 for every person engaged in the coal industry. The point that the Opposition are making, and were making before the strike started, is that it would be highly desirable for the nation to avoid that massive expenditure.

Mr. Cockeram: Indeed, it could have been avoided if the miners had been allowed a ballot. This massive sum works out at £16,000 per worker in the industry, and that is under this year's measure alone.
The House and, indeed, my hon. Friends have been through many traumas because of the proposed cuts in Government expenditure for relatively piffling amounts as against the sum that we are being asked to authorise tonight—a cut in parental grants for education, a cut of £75 billion in regard to generic prescribing and a host of such measures—yet in one three-hour debate on Second Reading of a Bill that was introduced only on Thursday last week we are being asked to approve a compulsory taxation on every worker in the country totalling £2,650 million.
Given the Government's regional policy and the objective of seeking to direct industry to the north of England and other places of high unemployment, I suggest to the Ministers concerned that there is no case for continuing to subsidise one industry in the south-east, namely, the coal industry. There is no case for continuing to subsidise the Kent coalfields. They are in the south-east of the country in which no other industries are allowed to set up and receive subsidies. In accepting this measure, we will be continuing to support that industry.
My right hon. Friend the Secretary of State, in introducing the measure to the House, said that this level of subsidy to the coal industry in the past has been intolerable. I agree with the Secretary of State that this level of subsidy has been intolerable. The level now proposed by definition must be even more intolerable.

Mr. Alec Woodall: In my opinion, this Coal Industry Bill is no different from previous coal industry legislation introduced by the Government and it will probably be no different from any future coal industry legislation that may be introduced by the Government.
The Government have declared their firm intention that the coal industry should break even by 1986–87. They say that they want to bring down the cost of coal to help industry. I do not believe them. The whole idea of the Coal Industry Bill, as with previous, and no doubt future, coal industry legislation, is to make the industry break even so that the Government and the National Coal Board together can sort the wheat from the chaff and close the uneconomic units, after which they will prepare the industry for privatisation.
The Minister, I note, shakes his head. I am pleased that he does, because I intended to ask him whether he would deny this when he winds up the debate.

Mr. David Hunt: I shall.

Mr. Woodall: I am grateful for the Minister's advance notice.
I hope that I am not being unparliamentary when I say that I just do not believe the Government. The thousands of millions of pounds that the Government boast they are investing in the industry are being invested for one reason only. The Government are involved in asset-stripping and closing down pits in order to prepare the industry for privatisation. The amount of money about which the Government have boasted pales into insignificance when one considers what it has cost them to beat the miners in the recent dispute. That strike was caused deliberately by the Government when they announced five pit closures without any prior consultation. The amount of money that it cost to win the Falklands war was peanuts compared with what the Government were prepared to spend to beat the miners.
The Secretary of State spoke of the loss of coal faces. I am more concerned about the loss of pits, because the first closure to be announced after the strike ended was Ackton Hall colliery in my constituency. That colliery is the life-blood of Featherstone, and we are concerned about what will happen to that community when the pit closes in a few months' time.
It is said that if Featherstone Rovers needs footballers, one need only whistle down the shaft and up will come players good enough to go straight into the first team. I am proud of that because I am a vice-president of Featherstone Rovers, and we have not had a bad season. We finished ninth in the league, and we had no crowd trouble. We do not need an electric fence. I point out to the chairman of Chelsea that last February an electrical fault was the cause of Featherstone Rovers' grandstand being burnt down. There must be a moral there.
I am particularly concerned about job opportunities for the youngsters of Featherstone when the colliery has closed. The men will be transferred. Those under a given age will be found jobs at other collieries. Fortunately, Featherstone is only a dozen or so miles from the Selby complex.
What will happen to the youngsters of the area? It is all very well for the Secretary of State to talk of the enterprise scheme and how 200 jobs have been created as a result of it. When the Ackton Hall closure was announced, I made inquiries of the NCB about the enterprise scheme, and the details that I was given were confusing. In any case, £10 million is inadequate to make up for the jobs that will be lost in mining areas such as Featherstone, Hemsworth and South Kirby. A total of £10 million will be only a drop in the ocean. Far more jobs are being created by the efforts of local authorities.
I urge hon. Members to take care lest they think that the enterprise scheme is designed to hand out money for the provision of jobs. I have a letter from the chairman of the NCB which makes it clear that the money will be given in the form of a loan. Not many jobs in areas such as mine will be created simply by money being loaned. We need real aid, and £10 million will go nowhere towards solving the problem.
The Secretary of State referred to the need for "rational decision-making." We cannot divorce this debate from the recent dispute. The right hon. Gentleman can talk all he likes about the need for the NCB and the NUM to reach rational decisions together, but in the present climate rational decision-making is an impossibility. That is a pity in view of the good will that was built up in the coal industry since nationalisation, and a great deal of good will was needed.
Nor should Conservative Members refer to clap-trap about the bad old days being uttered from these Benches. I lived through those times.
My right hon. Friend the Member for Blaenau Gwent (Mr. Foot) talked about Lord Blyton paying his debts. I know all about that, because it happened to my own mother, who was widowed in 1926. My father died of a broken back in a pit accident, but his rent book was never changed. My mother went to court after the strike to be charged with owing rent. When my father's name was called, she stood up and said that she was there to reply. She was told that there was no case against her, but she said that she wanted to pay all the money that her husband owed on the rent book. It took her until 1945 to pay off at sixpence a week the sum imposed by the court.

Mr. Cockeram: Does the hon. Member accept that those miners who have incurred debts as a result of the recent strike had no opportunity whatsoever to decide whether they wished to go on strike? They were forced to incur those debts because they were forced out on strike without a ballot.

Mr. Woodall: The hon. Gentleman has overlooked the fact that I am a Yorkshire miner. The strike started in Yorkshire and it was virtually solid to the bitter end. A ballot was held in Yorkshire, and permission was given to the Yorkshire executive committee to call the men out on strike if any pit in Yorkshire was closed for a reason other than seam exhaustion. The ballot was taken in 1981 and 84·6 per cent. voted in favour of strike action. When it was decided to close Cortonwood without prior consultation, the Yorkshire miners to a man walked out and remained out until the end of the dispute. All this claptrap about not having a ballot is a load of nonsense.
It is all very well to talk about rational decisions, but they have gone for good. The good will and the open-door policy which were manufactured, worked and slaved for and brought about men such as Arthur Horner, Will Paynter, Joe Gormley, Lawrie Daly and Lord Ezra, Ned Smith and Geoffrey Kirk on the board side have now gone. Instead of our having an open-door policy, the door is now, and is likely to stay, firmly locked, bolted and barred.
This week a strike started at my old colliery, the South Kirby colliery, where I worked before I came to the House. Four men were sacked. Their crime was vocal intimidation. I spent six and a half years in the army during the last war and I found that there was a crime called dumb

insolence, and my God it was a terrible crime. One smack in the face by dumb insolence and we saw stars. Here we have four men committing a crime that is far worse—vocal intimidation. If grown men cannot fall out and have words, whether it be about Steve Davis and Dennis Taylor, Everton and Manchester United or Arthur Scargill and Ian MacGregor, without getting sacked, where the hell is the industry going?
It is all very well to talk about rational decisions. I have here a newspaper which was sent to me this week. I do not recommend it to anybody, but I want to point out a headline on page 3—"NCB's duty to heal wounds."—[HON. MEMBERS: "Hear, hear."]—Yes, "Hear, hear."
How can wounds be healed when, as soon as the strike is over, the National Coal Board decides on a policy of reorganisation and promotion and the men who are promoted are the hardliners—those who have issued dismissal notices to men without any thought of giving them back their jobs. Yet we are talking about rational decisions.
At practically every pit in my area the local branch officers, who have to deal on the spot with any dispute that might occur, have all been told, since the strike ended, that they have to take backshift work, work afternoons, nights, and all the hours of the day. Normally they were on regular days so that they could be present and meet management to talk about the disputes which crop up day by day—probably nipping many little disputes in the bud. They have all been put on regular rota and backshift work, which makes it virtually impossible for any pit manager to call on his branch officers and get a reasonable decision or to talk about any possible dispute. That is why South Kirby colliery is now out on strike and calling for the rest of Yorkshire to come out. Four men who had a vocal punch-up at a bus stop have been sacked. Yet people are talking about coming back to the making of rational decisions.
I am worried about the coal industry. I worked in the pits for most of my life. I started when I was 14 years of age. I left the industry to come to this House in 1974 I have been a member of the union ever since I started work as a boy. I served on the consultative committees and worked through my branches to make my pit a happy pit. There is no such thing today as a happy pit, and there is nothing in the Bill to make any pit happy. The Bill is inadequate. There is nothing in the Bill to improve industrial relations.
I should like to know why there is no mention in the Bill of the enterprise scheme. [Interruption.] Something needs to be in the Bill if we are to help areas in which pits are being closed.
There is no one in the House with his ear closer to the ground than mine in mining areas. I speak as a practical man. There are nine pits in my area and I know the officers of every one of them. I know the feelings in every one of them. It is no good talking about getting back to normality. At the present time that is impossible. The Government are to blame for that, and I do not take any joy in having to say it.
It is no use Conservative Members paying lip-service to the coal industry. We are wise to them. The Secretary of State for Transport let the cat out of the bag. The only sympathy that Conservatives have for the coal industry—if it can be called sympathy—is related to getting the industry on to a rational, saleable footing, so that it can be sold off. Bit by bit they will get rid of it. Pits that cannot


match up to the Government's economic considerations will go by the board. There will be more closures, there will be more job losses, and there will be more unhappiness in pit areas such as mine.
I take no joy in having to state the simple truths about what people think in areas such as mine which depend on coal. We have depended on coal all our lives; it has been our life-blood. The Government are going to drain the life-blood out of us. Shame on them for it.

Mr. Francis Maude: I have listened to the debate with growing astonishment and wonder. When the right hon. Member for Blaenau Gwent (Mr. Foot), as befits a distinguished historian and essayist, took us on an excursion into the past, my wonder increased. The hon. Member for Hemsworth (Mr. Woodall), in the latter part of his speech, gave a spirited defence of intimidation, and increased my astonishment further.
It occurred to me to speculate on what a casual visitor to the Chamber, who did not know what the Bill contained, would think we were talking about. We had wonderful sentimental phrases from the right hon. Gentleman about "this great industry of ours". In what I hope was a slip of the tongue he referred to "this great industrial dispute of ours". It was an unfortunate slip of the tongue. When we refer, in a slightly sentimental way, to this great industry of ours it is salutary to remember, as we were reminded by my hon. Friend the Member for Ludlow (Mr. Cockeram), who injected a welcome measure of common sense into the debate, that we are referring to an industry which costs the taxpayer every year well over £1,000 million. This Bill will enable a further £2,600 million to be paid to the coal industry, yet the Opposition would have us believe that this is a wicked measure which will allow the great coal industry of Great Britain to be sold to Taiwan. Instead, it will enable an enormous amount of money to be levied from the taxpayer and paid to a bankrupt industry in order to keep a large number of men in work.
As Mr. Speaker reminded us yesterday, the House of Commons has the sole right to levy taxes in this country. Therefore, it behoves us to remember that this represents a levy on every taxpayer in the country of £2 a week in order to sustain the industry. When I hear the hon. Member for Hemsworth say that we are paying lip service to this industry it annoys me. If £2,600 million is paying lip service to the industry, Heaven help us when we actually get down to business.

Mr. Woodall: The hon. Member has referred to the cost of this industry to the country. Does he realise that from the day that the very first sod was cut the Selby complex cost £2 million a week? That continued for three years before a single nut of coal was mined. Money is invested in the mining industry and the return on the investment comes later. But the Government intend to sell off the industry.

Mr. Maude: I shall ignore the last part of the hon. Gentleman's intervention, a leit motif that ran through his speech which is wholly irrelevant to the discussion of the Bill. Instead, I shall concentrate upon the substance of his intervention. He referred to the public money that has been

spent upon developing Selby. That is investment and is wholly separate from the sums of money with which we are dealing. We are dealing in the Bill with a subsidy for revenue deficit and with various other revenue subsidies. We are not dealing with capital. Capital is in addition. When the hon. Gentleman refers to Selby he ought to sort out the difference between capital and revenue. I do not think that he is clear in his own mind about the difference between the two. We are talking about a vast sum of money which makes investment in a number of other industries seem insignificant. My hon. Friend the Member for Ludlow told us that over the last three or four years the amount of money needed to sustain coal miners in work has doubled every year.

Mr. Barron: Not in Warwickshire.

Mr. Maude: The hon. Gentleman refers to the pits in Warwickshire. I represent, as does the hon. Member for Hemsworth who preceded me in the debate, a coal mining constituency. I shall deal later with the Warwickshire aspect of the industry. My right hon. Friend the Secretary of State for Energy expressed the hope and the intention that by 1987 the coal industry would break even. I am sure that I am not the only hon. Member who has heard those sentiments expressed on previous occasions. One might call them pious hopes. However, every 18 months or two years a similar Bill is introduced.
I believe that I am not alone in thinking that the coal industry will start to break even and seriously address itself to the problems of losses, uneconomic capacity and subsidy only if it is told that in 1987 the tap of public subsidy will be turned off. That would concentrate the minds of all those connected with the industry, including managers, deputies, miners and, I hope, hon. Members who have the honour to represent coal mining areas.

Mr. Allen McKay: Would the hon. Gentleman care to explain to the House what he believes is uneconomic capacity?

Mr. Maude: No. I make no apology for that reply, because I am an hon. Member, not a coal mine manager, and it is for those who are employed to manage the industry to decide what is economic and what is uneconomic.
I know about the argument that the hon. Member for Barnsley, West and Penistone (Mr. McKay) would like to adduce, namely, that it is not always a straightforward matter to decide which mines are economic. Of course, it is a difficult decision, but the House raises the money to pay for the losses and we can see that the industry as a whole is grossly uneconomic. That problem must be addressed quickly.
Two avenues must be followed if the industry is to break even and become cost effective. The first is the reduction of uneconomic capacity. Labour Members sometimes react as if that had never been done before and as if private industry had never had to do that. All industries constantly have to examine their capacity to see whether it is efficient and economic. If it is uneconomic, it must close. It astonishes me that, after all that we have been through and after all the debates on these matters, there can be any remaining doubts about that. Yet the sentimentalists and traditionalists on the Opposition Benches wish to retain the system under which we have a major battle every time it is proposed to close even a small amount of uneconomic capacity.

Mr. Barron: Will the hon. Gentleman give way?

Mr. Maude: I wish to be brief, so I hope that the hon. Gentleman will forgive me if I do not give way to him.
The other avenue that has to be followed is the development of new, low-cost capacity. We have heard about Selby and Asfordby and no doubt various hon. Members will mention other possible developments. Hon. Members will be keen on such developments if they are outside their constituencies and less keen if they are in their constituencies. I am in the first category in talking about the prospects of developing the south Warwickshire coalfield. We have the potential there to develop the most profitable coal in Europe. It is an enormous reserve, which can be easily mined and it would help enormously to reduce the average cost of British coal.
I wish that we did not have to go through this degrading business of discussing enormous levies from the taxpayer to sustain the coal industry. I should like to see a low-cost industry which is exporting—as it used to—is high volume—as it would be if we were exporting—and pays high wages. Labour Members talk about American styles of mining and management. I should like to see American-style wages, because miners in parts of the American industry earn £25,000 a year. Do Labour Members wish to pretend that that is not so? Should not they be fighting for such wages?

Mr. Barron: Where is the hon. Gentleman's evidence?

Mr. Maude: The evidence is readily available and I will provide it for the hon. Gentleman. One of my hon. Friends tells me that the evidence is in the Library. I do not have the evidence with me, but I can certainly pinpoint it for the hon. Gentleman.
Members sponsored by the NUM and NACODS should be jumping up and down with glee at that prospect, bullying the Government to take those steps and banging on the door of Hobart house fighting for those developments and for a high-wage industry. We should put these degrading spectacles behind us and move to a high-wage, high-volume, low-cost industry as quickly as possible because that must be the future for the coal mining industry in this country.

Mr. Jack Dormand: We had an extremely disappointing speech from the Secretary of State. I appreciate the limitations on a Minister introducing a Second Reading debate, but the Secretary of State failed to address himself to the immediate problems which have arisen as a result of the strike and which will continue for a considerable time.
Regrettably, too, the Secretary of State implied in the first part of his speech that the dispute had been caused by the National Union of Mineworkers. Any fair-minded person, certainly anyone with the Secretary of State's intelligence, would have said at the very least that there were two sides to the problem. For reasons that we have given many times in the House, we believe that the strike was caused by the National Coal Board, not least by its chairman, and by the Government themselves.
Having begun in that extremely disappointing way, the Secretary of State went on to talk about "rational decisions", by which he meant Government decisions.

Government decisions are not rational decisions, although I hope that from now on some literally rational decisions will be taken.
The Bill will help to accelerate pit closures. As the Government and the NCB are hell bent on that objective, we must consider what can be done to mitigate the effects of such a misguided policy. It should be stated clearly and firmly that what was said during the strike about the case for coal and about the effect of pit closures on mining communities is as relevant today as it was every day throughout the dispute.
I intend to ask some specific questions and I hope that we shall get specific answers from the Minister. Those questions are crucial not just to the industry but to the inhabitants of mining areas. First, however, I should make it clear that I have never shared the Government's view that confidence in the industry has been lost. I can understand that view, but in fact throughout the year-long dispute that loss of confidence did not take place. l shall give two examples.
On 20 February, the Minister replied to a question from me about the coal-firing scheme, in which I have taken a special interest because boiler conversion to coal is important for the development of the industry. I asked how many projects had been accepted and the amount of grant paid in each year since the scheme began. It is significant that in 1983, before the strike, 127 projects were accepted compared with 94 in 1984. More than once in debates and at Question Time the Secretary of State gave the clear impression that the scheme was virtually at a dead end because business men were no longer applying for it, but the Minister will readily agree that the figures that he gave on 20 February show no such lack of confidence in the industry. During 1983, grant for the 127 projects amounted to £3·82 million. Last year, grant amounted to £6·72 million—double the previous year.

Mr. David Hunt: I am sure that the hon. Gentleman will recall that my right hon. Friend the Secretary of State said on many occasions during the past year that he hoped that 1,000 firms would convert to coal. Unfortunately, the strike destroyed those plans.

Mr. Dormand: I do not accept that—it is a red herring. We are entitled to compare the number of projects that received grant last year during the thick of the strike with those that received grant the previous year.
I have to be careful about my second illustration because I do not want to reveal too much. During the past few days I have spoken to a senior manager—he is not really a manager, but I have to disguise him as he is at a very senior level in the coal industry. He is concerned about recruiting markets. He has been around the world a little and I asked him what was happening. He said that it was tough, but the markets were coming back.

Mr. Hunt: It is vital for the future of the industry that markets return. I have visited many potential coal conversion schemes during the past few weeks, and at last confidence is returning. However, it is returning for one reason—because during the 12-month strike the NCB, thanks to the efforts of its marketing department, was able to keep the industry supplied. The working miners kept confidence in the industry.

Mr. Dormand: The Government cannot have it both ways. The simple fact is that markets are returning because there is confidence either in the short, middle or long-term future of the industry. The Minister gave a non-answer.
My first question relates to the £10 million that NCB (Enterprise) Limited is making available for the rejuvenation of the coal mining areas. The first announcement about such aid three or four months ago involved only £5 million. Someone described it as chickenfeed. Then, in answer to my parliamentary question, the Secretary of State said with great pride that the sum had been doubled to £10 million. My constituency could use £10 million, let alone the whole of the British coal mining areas. Is there any likelihood of that sum being increased? I know that the right hon. Gentleman said today that it would be increased, but I hope that that will not mean an increase to only £12 million or £12·5 million. We need a minimum of £50 million.
Let us consider what happened in the steel industry. I remind the House of Consett in the county of Durham. Money should have have been made available to that area, but almost no improvement has occurred in that part of Durham. I implore the Government vastly to increase publicity about the scheme. I have spoken to a number of business men in my constituency and elsewhere but have come across only one who has heard about the scheme and applied for aid.
My hon. Friend the Member for Hemsworth (Mr. Woodall) said that administrators were uncertain of what to do. I do not blame them for that. They are hesitant to consider a grant. I urge the Minister to take a close look at this matter and ensure a speeding up in the granting of money.
My second question relates to the contribution that the Department of Energy will make towards reconciling mining communities with the police. I hope that the Minister will not play Pontius Pilate and say that that is a matter for the Home Office. It is a matter for his Department, and I am pleased to have the Minister's assent. I accept that it is a matter also for the Home Office. I cannot stress too much that relations between the police and mining communities have broken down. I am proud that I have been a member of a mining community all my life. I am proud also that I come from a mining family. Mining communities are great respecters of law and order, or have been. I tell the Minister with all the force that I can muster that that is not the attitude now in mining communities. I hope that the Department of Energy will make a contribution to restoring respect for law and order.
What do Ministers in the Department of Industry intend to do about the wholesale breaking of local agreements? If anything was designed to poison industrial relations, it is the breaking of the agreements, which were a demonstration of flexibility and good management in a particular pit or local area. In some areas a seven-and-a-half hour shift was agreed for good reasons, but there is a move back to the old eight-hour day. That has been happening throughout the area which I represent. It is a demonstration of the hard line which the coal board is taking, with the knowledge of the Secretary of State and the Under-Secretary of State.
What are the Government's policies on opencast coal mining and on the importation of coal? We all know that strip mining is so much cheaper than deep mining. We

want an assurance that the balance will not be changed to the disadvantage of deep-mined coal. This is important for the future of the industry.
I wish to draw the Minister's attention to the coalfields', local authorities' and communities' campaign. It is a consortium of local authorities whose communities will be affected seriously by pit closures and colliery job losses. Will the Secretary of State undertake to have continuing consultation with the consortium? It will ensure that all the problems stemming from closures and job losses will be collated. The problems should be considered by the Government if they are concerned genuinely to restore good will and economic progress in the coalfields.
I believe that the Government are underrating the problems in the coal mining communities. Some would say that it is more likely that they do not care about the problems. The Secretary of State has said nothing this evening to convince me that the Government care and that they are prepared to work constructively in areas such as the one that I represent. The breaking of local agreements is a perfect example of how not to improve industrial relations after a dispute. The provision of £10 million for new jobs is already being laughed at by miners and their families. It is a sign of the Government's lack of real commitment to rejuvenate miners' communities. Thousands of young miners who have been made redundant will not have another job for years. I beg the Secretary of State to undertake a complete reappraisal, in spite of what has been said this evening, of the future of the industry in mining communities. The Bill does not even begin to meet the problems.

Mr. Peter Rost: I regret that I cannot support the Bill. I have seen too many Coal Industry Bills to stomach yet another. I have heard it all before. I have heard all the promises about the industry breaking even, but each new Coal Industry Bill is accompanied by even greater handouts from the taxpayer. The more subsidy we provide, the less financial discipline remains.
We should have before us a Bill that includes the repeal of the nationalisation Act. The industry should be restructured to promote the development of competition. Such a Bill should promote private investment in the industry. It would serve the miners and the communities to better advantage.
The Government's successful privatisation programme was implemented not only to raise cash for the Treasury. The Government's central strategy is that it will improve the efficiency and competitiveness of the economy if we reduce public sector expenditure. That has been the motivation. Could any industry be more eligible within that central strategy than the coal industry?
If we are to make the industry self-supporting and profitable, if we are to improve conditions and industrial relations, the only way to achieve those aims is through privatisation, as the Government have admitted with all their other privatisation measures. Why should the coal industry be exempt? Indeed, it should be the top priority, because it has been a bigger burden on the economy than have other industries, and it is more vital to the future of the economy than are many industries which have been privatised.
I would argue further that, had the industry been privatised earlier, we would not have had the recent terrible, damaging dispute, because the hopelessly


uneconomic capacity would have been closed long ago, new investment would have gone ahead earlier, industrial relations would be more harmonious instead of being chaotic, productivity would be higher and the earnings of those working in the industry would be better.

Mr. Barron: rose——

Mr. Rost: I shall not give way, because I wish to be brief.
If anything is to be learnt from the latest dispute, it is that nationalisation has been disastrous. It has not fulfilled its promise. Even if there were political, economic and social justification for nationalisation in 1946, those arguments are completely irrelevant now. It must be evident that nationalisation has brought weak, inefficient and bureaucratic management and poor industrial relations. It has not brought incentives or rewards to those who work in the industry. Morale has been poor from top to bottom, and marketing has been uncommercial.

Mr. Barron: Will the hon. Gentleman give way?

Mr. Rost: No. The hon. Gentleman will have an opportunity to make his own speech if he allows me to make progress.
The cost to the nation of endless subsidies to the coal industry has been a huge burden on our economy. Consumers have suffered from unnecessarily high coal prices, which in turn have brought uncompetitive electricity prices. That has aggravated our industrial decline and created unemployment. The high price of electricity and the burden on the Government of having to finance these huge and ever-increasing deficits have prevented those resources from being deployed in other areas. I estimate that, since 1966, coal board deficits that have had to be financed by endless Coal Industry Bills, adjusted to today's money terms, amount to £7 billion. If we add the figure in this Bill, the amount is more than £9 billion. In addition, we have written off from the balance sheet another £6 billion in capital debt. None of those figures includes the investment programme on which we have not had an adequate return.
If that huge cost to the economy had produced an efficient industry and low-cost coal, there might have been some justification for it, but it has not done so. Indeed, it has had the opposite effect. It has perpetuated the inefficiency in the industry, and now we are being asked to provide more. Had those subsidies been allocated to other more cost-effective projects, we could, for example, have had a Severn barrage providing 10 per cent. of our electricity at the cheapest possible cost. On top of that we could have had three or four nuclear power stations, again providing the cheapest power that we could have, and we would still have had enough left over to build about 10 major combined heat and power district heating schemes, which would provide cheap heat for millions of our citizens. We have done none of that. Year after year we have sunk in increasing subsidies to the coal industry——

Mr. Barron: Will the hon. Gentleman give way?

Mr. Rost: I have already said, if the hon. Gentleman will forgive me, that I should prefer to allow him to make his own speech if he will let me make a little progress.
Therefore, I argue that, whatever justification there might have been for nationalisation in the past, it is totally irrelevant today. We should now get on with the restructuring of the industry. Its monopoly powers should

be broken. Opencast mining should be hived off entirely from the coal board, with the Department of Energy as the licensing authority. Then it would be not held back and restricted, but set free to compete.
We already have a deep-mine private sector coal industry, with about 130 mines. Why should each mine be restricted to 30 miners and limited production? Why not allow the monopoly statute to be broken so that we can encourage private sector mining?
Why cannot we have mineworker and management buy-outs, as with the National Freight consortium, so that the miners can benefit from what they produce in terms of profit-sharing? In that way many of the so-called marginally uneconomic mines could turn out to be marginally profitable.
With regard to the new coal areas, there is no reason why private sector investment should be prohibited from participating. Why should British companies, such as British Petroleum, with huge mining expertise, have to invest abroad in coal mining and be prohibited from participating in our industry? Many British enterprises would look for successful investment opportunities in the coal industry if they were allowed to participate. We could be producing at least 60 million tonnes of coal in the private sector at below £30 a tonne. The rest of the production could still be subsidised on a phased-out subsidy, but it would be far more cost effective to the taxpayer if subsidies were made available to the private sector rather than to the NCB.
My argument rests on my concern for the industry. Why should miners, who have had such a raw deal from nationalisation and, more recently, from their NUM leaders, be denied the benefits and advantages that have come to workers in other industries that have been privatised—profit sharing, share ownership and other real incentives? Why should they not be allowed to benefit from the advantages that are enjoyed in industries that have been liberated from the state?
If it were the Government's intention to provide the consumer, the taxpayer and those working in the industry with a better deal, we would be moving in that direction in the Bill. We have the largest reserves of economically recoverable coal in western Europe. We know that coal has an increasingly important role to play in our energy economy and that of western Europe in the two or three decades to come. We have a huge potential for increasing, not contracting, production, because of the export markets that we could win back and because of the new markets from pulverised coal, coal gasification, combined heat and power and fluidised bed. We could win back markets that coal will have to win back in the long term in any case. That potential has not been exploited by the nationalised industry. Indeed, it has failed to do so. Yet that potential will need to be developed if our economy is to benefit.
On past performance, there is little to inspire confidence that the industry's structure can be relied upon to harness its enormous potential, even if we could afford the huge price of retaining the industry in the public sector. We must now set it free and give it an opportunity to realise that it must make a critical contribution to the national economy.

Mr. Michael Welsh: rose——

It being Ten o'clock, the debate stood adjourned.

Ordered

That, at this day's sitting, the Coal Industry Bill may be proceeded with, though opposed, until any hour.—[Mr. Peter Lloyd.]

Question again proposed, That the Bill be now read a Second time.

Mr. Welsh: Some hon. Members have attacked nationalised industries and have said that if they were privatised they would not have to be subsidised. One industry which is not nationalised is farming. It is efficient and receives subsidies year after year. Conservative Members contradict themselves. They vote in favour of subsidies for farming. I do not criticise that, because it might be necessary to subsidise the farming industry to make food cheaper, but if that is so hon. Members should not attack subsidies to the coal industry.

Mr. Barron: Earlier an hon. Member said that a £10 million subsidy to the NCB was chickenfeed; but chickenfeed producers also receive subsidies.

Mr. Welsh: That is a fair point.
We must consider other countries, especially those in the EEC. The 1983 subsidy for the United Kingdom was £7·4 per tonne. For West Germany the subsidy was between £11 and £12 per tonne. For France it was £19 per tonne and for Belgium £13·3 per tonne. Our industry receives the lowest subsidy in the EEC. The figures are not mine, but from the EEC accounts.
One of the reasons for the coal subsidy is that our coal is sold too cheaply. After the war, the market price for coal could have stood an increase of £1 or £2 per tonne, but inflation had to be kept down. It could have been a rich industry if the market price had been charged. Selling coal so cheaply helped business and the country, but it did not help the industry or the miners.
The Bill is supposed to help the industry in the next three years. The Government figures are always a year behind the coal board accounts. The grants allocated for 1987 will be paid in 1988. The grants would then be given in a financial year that was the same for the Government and the NCB. Otherwise the grants will be for a different financial year. That would mean that the NCB might not have to break even on the Bill in 1987, but could carry on till 1988. I hope that the Minister will be able to explain how he hopes to help the industry through that crucial period.
Can the Minister also tell us how far the administration costs are charged to the NCB? Perhaps he could give us a percentage figure. I am also interested in deferred payments. They are not referred to in the Bill. We never seem to see the figures. I shall take the example of Thorne colliery in my area. It is a new colliery. About £3 million is being invested at the pit bottom this year, and about £20 million or £30 million is needed to start the number three shaft working. With Thorne colliery as with all new pits, the critical path is about 10 years. A tremendous amount of investment will be needed before coal is produced. Will the money be borrowed on deferred payment terms? If so, is that money over and above the sum that the NCB is permitted to borrow?
The NCB can be criticised for borrowing from the Government but is not allowed to look anywhere else. It is not allowed to turn to the free market or to the EEC. Especially with regard to new developments that are in the pipeline, it is important that the NCB should not be

expected to break even when it is borrowing millions of pounds that will not bear fruit for some time because of the critical path.
Managers do not produce coal. They are necessary, and they are responsible for the colliery, but they do not produce coal. One might say that machines produce coal, but the machines have to be worked by miners. If the relationship between the management at colliery level and the miners is unsettled—and it is unsettled to say the least—there will be no coal production. The relationship is very bad. Some of the lads are saying, "Wait till the black stuff comes out. There will be good relations then or they won't get it." It is vitally important that relations at colliery level should be better.
Then there is the question of custom and practice accepted at the pits for years. Not all customs are good. Some may be good; others could perhaps be reconsidered. However, management is breaking them without any negotiation at all. It is unbelievable that a management that wishes to work with the men and produce coal should behave like that.
For example, some lads work in water from the roof. That water is very salty and sometimes there is oil in it. When a miner has worked on the coalface or the frontlip for six hours, he is ready for a bath. It was the accepted practice and custom that the men arrived an hour earlier, although they did not leave the pits earlier because it took them that long to bath and to scrub off. However, the management stopped it. When the lads reach the pit bottom now, they stand waiting in the queue with their clothes wet through because the management has decided that the local agreements just do not stand up. It is not logic. If I were a manager—of course, I am not—I could not do that because I would want the men to produce more coal for me.
It is the duty of the Secretary of State to bring this matter to the attention of the leaders of the nationalised industries. We all want an efficient industry. The attitude of management must change. Managers must work with the union men. They are not even negotiating compensation cases. These cases are important, and they must be settled. The Secretary of State would do well to discuss this matter with higher management to see whether something can be done to improve the silly method of industrial relations which has continued since the dispute ended.
I agree that the industry needs increased productivity, but it also needs increased production. It is no good increasing productivity if production is decreased because the unit costs then fall on a smaller number of units, and pits which were economic will be made uneconomic. I can remember the Minister stating during the strike that the production target should be 125 million tonnes, an increase of 25 per cent. That is good sense. The market is at fault because it is left to the whizz kids of the NCB, the sellers of the coal. For selling coal abroad, one may have to use different methods. Indeed, coal may have to be sold cheaper for various reasons. There is nothing wrong with that because it will keep down the unit costs. I hope, therefore, that the Minister will agree that production as well as productivity must be increased. If not, the industry will never break even, because the unit costs will increase.
We must work for an efficient industry, although I do not agree with the closure of pits. Towards the end of the century, we will need all the coal that we can get in order


to extract its oil content for the use of other industries. If we consider the matter in any other way, we will be taking too narrow a view. We must aim for a good and efficient industry and, in so doing, we must look after the work force. If we look after the miners in the British coal industry, they will produce the coal for the country.

Mr. Peter Hardy: I wish first to pay tribute to the hon. Member for Orkney and Shetland (Mr. Wallace), who has been present throughout the debate—the only member of the Liberal party who has. He must carry a heavy burden, of course since he also represents the Social Democratic party, not one member of which has been present throughout the debate. Those hon. Members with coalfields in their constituencies read frequently in the local papers of the passionate concern for the coal industry demonstrated by that other half of the alliance.
Although they are not present, they may share the Secretary of State's view that there are substantial prospects, that we have good reserves that the investment record, to the tune of 95 per cent., is British-based and that over the years the NCB has ensured and will continue to ensure that we have a leading mining engineering and mining equipment industry. I agree that industry has an important part to play, but its future depends on the size of the base of the British mining industry.
If we are to achieve improved productivity, two aspects must be borne in mind. First, the Government's economic and industrial policy must be reversed. The main reason why productivity gains were not achieved in the early 1980s was that miners could see enormous stocks of coal, and nothing is more discouraging for miners than the sight of huge stocks outside their collieries.
If there had not been enormous cuts in the consumption of electricity, for example, by the special steels section of the steel industry, coal consumption for electricity generation would have been much higher, stocks would not have been so high, the dispiriting effect of the sight of those stocks would have disappeared and, as a result, morale and productivity would have improved.
We saw the decreasing morale problem developing with the appointment of Mr. MacGregor. As I have said in the past, some of us warned the Government months before the strike took place that a strike was coming, that it could be vicious and that it would be gravely expensive, and it proved to be even more expensive that some of us feared. It cost £32,500 for every man employed in the industry. That money could have been used to revive British industry and create the employment we need.
That is now behind us. As my right hon. Friend the Member for Blaenau Gwent (Mr. Foot) said, we are going through a delicate period. The efforts and priorities of the Government should be devoted to ensuring that the industry succeeds and that the problems and bitterness that have developed do not persist, so enabling the industry to achieve the success that we all want to see.
I am sure that the Secretary of State and his colleagues in the Department have devoted a great deal of attention and energy, and perhaps even enthusiasm, to ensuring that the industry succeeds in this post-strike period. The problem is that they are not being assisted in that endeavour by any evidence of wisdom on the part of those at the top at Hobart house. I had hoped, as the Secretary of State also hoped at Question Time on Monday, that yesterday's meeting would prove meaningful and helpful

and would lead to progress. While I am sure that Ministers want to see progress, I am not sure that those at the top at Hobart house do. If they did, they would adopt a more sensitive attitude to all concerned, and in particular the trade unions.
When union leaders tell me that the NCB boasts that the men are accepting voluntary redundancy—when the men are told, "It is either voluntary redundancy or down the road"—those union leaders are right to say that that is not voluntary redundancy at all. If the men are told they must accept the NCB's terms or become unemployed, that makes a mockery of the use of the word voluntary.
There is bitterness. It is clear that bitterness exists over the situation at Polkemmet, an issue which I discussed with my hon. Friend the Member for Linlithgow (Mr. Dalyell), as did my right hon. Friend the Member for Salford, East (Mr. Orme). The NCB lied to NACODS. NACODS was deceived and tricked. The Minister can take the NCB's word for it if he wishes to do so, but I have been associated with that for a long time and I assure the House that the leaders with whom I discussed the matter are not in the habit of lying, and I do not believe that they would lie to me. Be it Mr. O'Connor, the Scottish secretary, Ken Sampey, our long-serving president, or Peter McNestry, the general secretary, they are convinced that the NCB has deceived and cheated them on the issue of Polkemmet pit.
I am told that NACODS men offered to go down to turn on the valves to allow the pumps to operate. I am told that the National Union of Mineworkers would not have objected to that involvement of my association's members. I am told that the National Coal Board would not allow the valves to be turned or the NACODS men to go down, but that it assured my association that when the strike was over that pit would be pumped and the jobs saved.
However, the National Coal Board has now determined that, because of flooding, that pit must close. It has not even had the grace to wait until the NACODS agreement is in force before coming forward with that suggestion. It is also true that, under the old procedures before the strike procedures which my association's agreement is supposed to approve, the status quo certainly applied. The status quo is not applying now and, as far as I can see, the National Coal Board—I believe against the advice that Ministers have offered—is determined to get the pits closed before it makes progress on the NACODS agreement.
That is not the way in which honourable men should behave and the Government are in an embarrassing position. That is why my association, without wishing to get headlines, is now seeking the highest level meeting possible so that the Government can demonstrate that the words which they used in the House and outside it justified. If the Minister and his colleagues, including the Prime Minister, use the word "sacrosanct", that word must be applied. I have no time for the present Government, but I believe that the occupants of the Treasury Bench must stick to the words that they use. The British people, albeit that they may be members of trade unions and therefore not quite so highly regarded by Ministers and the rest of the population, believe that if Ministers use words at the Dispatch Box to make a commitment that must be honoured. I hope that the Government will take seriously the position which has now arisen and which has led my association to seek consideration at the highest level. I am awaiting the response to that request.
I am deeply concerned that we should allow the industry to succeed. That is why it would have been better for magnanimity to be shown immediately rather than for area directors to have to intervene at the level of decision making, which should have been left to managers. Many managers have made sensible decisions. There are pits in my area where managers have not sacked anybody even though that may be a posture that is not currently fashionable in the industry. The pits where that has happened are back at work and relationships are far better than in pits where vindictiveness has been shown and a particular manager may have sought glory or congratulation from the more hidebound or hard-line people who have been singled out for favour by the present administration of the industry.
I am making these points because I believe that we must have a successful coal industry. It is therefore highly desirable that consideration be given to the application of wisdom.
I accept that pits will close. No one in his right mind can expect a colliery to remain open indefinitely. I know, for example, that at Cortonwood a substantial proportion of the labour force would like to take early retirement or go to a pit with a long-term future. It is a pity that careful consideration was not given a year ago to allowing that procedure to develop naturally. But when pits close we are faced with dreadful problems, and £5 million or £10 million for the sort of scheme that is now being introduced and which may be the little seed from which great things will grow—although it will require a great deal of expensive fertilisation as well—will be necessary.
I heard from my borough council today in reference to a coalfield community campaign—of which the Minister will have heard and which must achieve a great deal—how great is the need.
This morning I looked at the analysis carried out by the director of planning in Rotherham. We lost 1,100 jobs in coal between 1979 and 1981. One would not have imagined so, judging by all the accusations of failure to contract, and so on, that we have heard recently. The labour force in mining in Rotherham fell by 18·4 per cent. in two years before the strike—6·6 per cent. in the country as a whole. But we also have to recognise that in those two years there was a 34 per cent. increase in the number of cases referred to our social services department; that the number of people on rent and rate rebate increased from 11,000 to nearly 20,000; that the number of people in housing rent arrears and the number of people approaching the poverty level virtually doubled in a two-year period before the strike. Yet the Conservative party wants to put areas such a mine into a position where that sort of experience is greatly intensified.
The time scale of change should not be so abrupt that it reflects cruelly upon any particular community. In my constituency, Brampton Bierlow is the village serving Cortonwood colliery. That village, which has 57 per cent. male unemployment, is dependent on Cortonwood, which is not a long life pit. The proposal to close it in five days did not assist that community. But £5 million or £10 million for the nation as a whole in generating economic activity in the coalfields will not help Brampton Bierlow sufficiently if it gets only an absolute statistical share of that money.
The mining communities and the local authorities serving mining communities, where the pits are old and of limited life, need a greater priority, particularly because there are no jobs, as some of my hon. Friends have said, for our young people. In the metropolitan borough of Rotherham, the proportion of our people under 25 is above the national average, which merely means that we face a more intense problem than we had before. But there is another aspect of the matter. If our crime rate in south Yorkshire increases over the next seven years as it has over the past three years, by the end of the decade it will be five times as high as it was when the Government took office. No civilised society can maintain itself if the crime rate rises in that way. If that trend continues, by the middle of the 1990s we shall have a crime rate seven times higher than it was in 1979.
If we condemn our young people to hopelessness, and if we deny hope and economic support to our communities, the quality of life in the coalfields of Britain, which once were stable and where people could live decently, will be in peril. It is not simply a matter of balancing the national books or of selecting areas for investment; it is a question of making sure that life in Britain remains civilised and stable. It will not remain civilised and stable if we have people at the top of the coal industry who believe they have succeeded if they have tricked and deceived a trade union as responsible as mine.
The Minister has a very heavy responsibility. I trust that in his reply he will say something that will satisfy my union, but it will be satisfied only when the Government's word is demonstrably kept, and it has not been yet.

Mr. James Wallace: I thank the hon. Member for Wentworth (Mr. Hardy) for his kind introductory remarks, even if they were somewhat two-edged.
When I rise to speak in a coal industry debate, I am conscious that—unlike the Opposition Members and some Conservative Members who have spoken—I do not come from an area with any coal mining interests. Nevertheless, it is only fair to say that money going to the coal industry is contributed as much by people in my constituency and elsewhere as by people in mining areas.
Without any disrespect to hon. members representing coal mining, I suggest that the British coal industry is not their sole preserve. It is a national asset in which we all have some interest. That was one of the mistakes made by the hon. Member for Ludlow (Mr. Cockeram) when he looked at the deficit grant and said by how much it would subsidise each miner. He overlooked the extent to which the coal industry makes a contribution to our national life. Prior to the 1984 dispute, coal had emerged yet again as the principal primary source for the generation of electricity in this country. One cannot ignore what would happen if the subsidies to the coal industry were to be withdrawn, as has been suggested in the debate by ome Conservative Members. However, it is only right for the House to look carefully at the reasons for providing such large sums of money to the industry. We should look forward not to an open ended commitment but to the day when, as the hon. Member for Doncaster, North (Mr. Welsh) said, the industry will be efficient. That will be brought about not only by improved industrial relations, as the hon. Member suggested, but also by the replacement


of old, worn out and uneconomic capacity by new capacity and by developing existing capacity in such a way that it can win coal more cheaply.
Although this is a large sum of money, I believe that it ought to be regarded almost as a bridging loan. It was suggested earlier that the coal industry has been making losses ever since it was nationalised. That is not the case. The projected production levels in the "Plan for Coal" were substantially met until 1979. Those who worked out the "Plan for Coal" in 1974 could scarcely have foreseen the size of the recession in the coal industry and its great contribution to the lack of demand for coal. As many hon. Members have suggested, the prospects for the coal industry are very bright. Therefore this amounts to a bridging loan.
The Secretary of State for Energy referred to the interest which has been shown in the coal conversion scheme. Substantial numbers of former customers of the coal industry have returned and the industry has recovered the ground that it lost during the dispute. In the much longer term there are prospects for the gasification and liquefaction of coal. Although it may be 15 or 20 years ahead, it is essential that research into those techniques should be maintained.
It is agreed that there is a potential market for the coal industry, and in the immediate aftermath of the dispute it is important that we should do everything to enhance customer confidence in the industry. Although it was said that the hatchet would be buried and that there would be reconciliation, events have occurred since the strike ended which do not necessarily bear that out. Reference has already been made to Polkennet. In September 1984 Mr. O'Connor, the Scottish secretary of NACODS, appeared on television and said that he was alarmed by the brinkmanship tactics of the National Coal Board in Scotland. I wrote to the Secretary of State and expressed my concern about what Mr. O'Connor had said. I do not know him but——

Mr. Alexander Eadie: He is a very responsible man.

Mr. Wallace: The hon. Gentleman says that he is a very responsible man and I am sure that he is. What he said caused me considerable concern. I join those who say that there ought to be an inquiry into what took place in the Scottish coalfields during the strike.
The other matter raised by the right hon. Member for Salford, East (Mr. Orme) relates again to Scotland and to the lack of reinstatement of those miners who were sacked. I have spoken to the Parliamentary Under-Secretary of State for Energy, the hon. Member for Wirral, West (Mr. Hunt), about this. He pointed out that in Scotland perhaps greater care was taken prior to dismissal than happened in other places. Nevertheless, I have been informed of a good number of cases where the grounds upon which dismissal took place appeared to be relatively trivial. The right hon. Member for Salford, East mentioned the case of a senior union official at Bilston Glen who was acquitted in the Edinburgh sheriff court of the charges brought against him. I cannot accept that somebody who has been acquitted should suffer the double jeopardy——

Mr. Michael Fallon: He was not acquitted. The case was not proven.

Mr. Wallace: The hon. Gentleman says that he was not acquitted because the case was not proven. If he knew anything about the law of Scotland he would realise that a verdict of not proven amounts to an acquittal.
It is all very well for Conservative Members to say that sacked miners can apply to industrial tribunals and claim unfair dismissal. However, that misses two fundamental points. First, the unfair dismissal procedure cannot compel reinstatement and a person who is not reinstated loses not only his job, but entitlement to the various industrial benefits, redundancy pay and so on. Secondly, there is a conciliation and consultation procedure in the industry and that should be the first step. Going to an industrial tribunal should be the second step.
I wish that the conciliation and consultation procedure were used more often. My latest information is that the NCB has objected to the re-appointment of Mr. Jack Kane, who was the chairman of the conciliation and consultation committee. He is a respected former Lord Provost of Edinburgh, and before the dispute he had done his work successfully. The NCB's objections were seen as a fly in the ointment. They impeded moves towards better relationships between management and the unions.
Hon. Members have mentioned NCB (Enterprise) Ltd; and I remind the House that my right hon. Friend the Member for Plymouth, Devonport (Dr. Owen) accepted the need for such a company long before the Government. He pushed the case for establishing the company and my right hon. and hon. Friends believe that the £10 million given by the Government for the new company is inadequate. The Secretary of State told us something about the company's progress, but I note that in the United States some companies spend between 2 and 5 per cent. of pretax profits on community projects. The equivalent figure here is 0·1 per cent.
It is inevitable that some mines will close. Often miners themselves see the need for that. I hope that talks that take place before closures will involve not only representatives of the work force and the management but representatives of the local community, because a wider community interest is involved in such decisions. I do not come from a mining area, but communities matter greatly in my constituency and I empathise with mining communities that feel threatened.
No community should face the prospect of a closure without the prospect of new jobs. The planning for new jobs should not wait until the closure takes place. There should be discussions at an early stage to allow new employment opportunities to be planned and established before a closure. If that means postponing a closure, with some loss to the NCB, the Government should accept that that is a social cost, rather that an ecomomic cost that must be borne by the coal board.
The Bill gives an opportunity to bridge a gap and allows the NCB to get itself on its feet and reorganise more efficiently. As well as ensuring that possibility for the coal board, the Government must offer hope for areas which, because of closures, might not participate in the future of the coal industry. Those areas deserve hope and new forms of employment.

Mr. Dick Douglas: The Liberal party's case might have more force if its leader had taken the time to visit a pit and a strike centre when he came to my constituency during the dispute rather than just


whizzing through the area. As for the SDP, the right hon. Member for Plymouth, Devonport (Dr. Owen) shows exemplary interest in a number of things, but he has shown the extent of his interest in the coal industry by his continuous absence from coal industry debates. [Interruption.] If the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) wishes to intervene, I should give way, but he should not mutter from a sedentary position.

Mr. Archie Kirkwood: Where is Kinnock?

Mr. Douglas: I have some sympathy with Conservative Back Benchers, having listened to the Secretary of State introducing this important Bill. I have characterised the right hon. Gentleman on previous occasions as the custodian of the public interest, representing the shareholders of the nation. He comes to the House asking for a huge sum of money and, as it were, lays down the prospectus for the future of the industry. Unless I missed something, however, he said nothing whatever about the future output of the industry, future employment in the industry or even the number of pits. That is no way for a Government of business men to bring forward a prospectus and to ask for huge amounts of money.
In the circumstances, it is not surprising that some Conservative Back Benchers have objected. The hon. Member for Erewash (Mr. Rost) said that he could not support the Bill, because he wants the industry to be privatised. If he has read any economic history at all, he must know that up to the 1940s the industry was privately owned. All the difficulties in those days were the result of rapacious private enterprise. The idea that the Government should use public money to put the industry on its feet and then sell it back into private ownership is preposterous.
The Secretary of State has come forward with a good Bill for the industry, but he is counting the cost of the dispute after the event when a prudent Government would have counted the cost before the strike even began. My hon. Friends have referred to Polkemmet. I shall not rehearse the arguments about Bogside. I have described the situation in my constituency on several occasions. Ministers seemed to be well versed in what happened at Polkemmet, but they were completely ignorant about the huge exercise in industrial vandalism perpetrated at Bogside by Mr. Wheeler and his cohorts. The people of Nottinghamshire are welcome to Mr. Wheeler. I shall pray for them if he adopts the same attitude there.
On Monday the Secretary of State, in answer to questions that the Scottish director had been unduly vigilant in examining the cases of people whom he wished to dismiss, said that he was operating a unilateral policy and that Mr. MacGregor had nothing to do with it. More than 200 men were dismissed, but the Secretary of State tried to argue that people in other areas had objected because they had been dismissed for incidents less serious than those that occurred in Scotland.
I shall not deal with the whole Scottish coalfield or with every pit in my constituency. I shall not even refer to all the men dismissed from one of those pits, although I have sent details of all of them in a letter to the Minister. I shall give just a few examples of the dismissals at Comrie

colliery. Check No. 1089 David Carruthers, aged 51, was convicted of a breach of the peace and fined £25. After 30 years unblemished service in the coal industry, that man has been dismissed. If that is a serious crime, he should have been charged with a serious crime. In Scotland breach of the peace is not regarded as a serious crime.
Another man, George Wallace, check No. 1517, aged 30, was bound over to be of good behaviour for six months. He had been in the industry for eight months, and was dismissed. I could give other examples. One of the finest men I know is the chairman of my constituency party—[Laughter.] Why are Conservative Members laughing? This is a serious matter. His name is Robert Young, check No. 1569, aged 41. The offence was breach of the peace, and he was fined £75. He had 10 years service in the industry, and he was dismissed. I know that there have been instances of more serious offences, but all the offences involved in the cases I have cited have been for breaches of the peace.
Conservative Members ask why these men do not go to the industrial tribunal. It is because the NCB has a statutory responsibility to carry out a conciliation and consultation procedure. Those who have taken the trouble to read the report of the Monopolies and Mergers Commission will know how highly that has been praised. Do Conservative Members want unions to throw that away? They know that if an umpire decided that someone should be reinstated, that decision would be binding. That is not the case with an industrial tribunal.
These are serious issues. It is one thing for the Secretary of State and Mr. MacGregor to say that it is appropriate to adopt a flexible attitude to investment and profit; it is another to argue for decentralisation and a non-uniform policy for industrial relations.
I repeat that doing business with Mr. MacGregor is not something that I would ever want to do again. Ten Labour Members, including my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) met him on 20 March. We came away from the meeting thinking that at least we had made some impression. Yet within half an hour, he was contradicting every impression and word that he had given during the meeting. That man cannot be trusted.
I made a great mistake on Monday be referring to Mr. MacGregor as a Scot. He is a Scot by birth and an American by choice. The sooner that he returns to the United States, the better. It is a crying indictment of British management to have that man in charge of a public sector corporation. The Secretary of State should be ashamed of himself for asking us to put these sums of money into the hands of that vindictive employer. I am sure that the right hon. Gentleman, in his better moments, recognises that that man is not the person to carry the industry into the future. If we want better industrial relations and if we want the men to recognise that they have a responsibility for the pits, the lead must come from the top at Hobart house. It is my humble opinion that that lead will not come from the top while Mr. MacGregor is still at the NCB.
I hope that what I have said about Comrie colliery and the unfairness of the treatment there will be taken on board by the right hon. Gentleman and his hon. Friend. I hope that men throughout Scotland, but particularly those I have described on a case-by-case basis, will see the conciliation and consultation procedure reinvoked for the benefit of all.

Orders of the Day — Coal Industry Bill

Mr. Kevin Barron: More than two dozen miners have been sacked in my constituency, but dozens are working who have been convicted of the offences to which my hon. Friend the Member for Dunfermline, West (Mr. Douglas) has referred. No one has been sacked in my constituency for a conviction of a breach of the peace.
I am the fifth consecutive Opposition Member to speak due to the absence of the majority of Conservative Members. However, during the 12 months of dispute there was no shortage of Conservative Members who wanted to vent their spleen on the coal mining industry. We have an opportunity this evening to debate the industry at length but the majority of Conservative Members are not in their places. I suppose that they are somewhere in Mayfair or in their flats getting a good night's sleep.

Mr. Martin M. Brandon-Bravo: I am in my place.

Mr. Barron: I accept that one or two Conservative Members are in the Chamber. I hope that the hon. Member for Nottingham, South (Mr. Brandon-Bravo) will participate in the debate. I shall be interested to hear what he has to say about the coal mining industry.
The hon. Member for Erewash (Mr. Rost) seemed to have some difficulty giving way to me when he was talking about privatising the mines. My hon. Friend the Member for Dunfermline, West was right to remind the House that the mines were in private hands for generations prior to January 1947, and that they were found to be in a fair mess. On two occasions they were taken over by the state before 1947. That happened during the first and second world wars, when private ownership was not capable of providing the coal that was needed to enable Britain to fight world wars. It is sad that Conservative Members cannot remember what took place before 1947, which is a comparatively recent date.
I note that the hon. Member for Ludlow (Mr. Cockeram), like the hon. Member for Erewash, has left the Chamber. The hon. Member for Ludlow talked about the miners wanting £2 a week from those who are working. I have a photocopy of a letter that was sent to my father in 1951. Perhaps copies of the letter were sent to those of my hon. Friends who were working in the mines at that time. It was sent by the then Prime Minister and it is dated 11 January 1951. It is a reflection of what the miners have done for Britain, even if the hon. Member for Ludlow is right and they are asking for £2 a week from all those who are working. I have not studied the figures but I do not agree with the hon. Gentleman. I would not agree with him even if his figures were shown to be correct.
The letter of 1951 starts:
Dear Friend"—
in days past some Prime Ministers were friends of the miners, as some of my hon. Friends will remember. The letter continues:
Before Christmas the leaders of your National Union called on you to make a special effort to increase output and in particular to work on Saturdays. There was a fine response and I want to thank you for what you did then. But I want to ask you to carry on with your effort right through the winter months. We are still threatened with a serious shortage of coal. Apart from the difficulties in our homes there is a real danger that industry

may be slowed down. You will realise that this would mean unemployment for your fellow workers in other industries and hardship for their wives and families. It would also be a blow to our national recovery. I am therefore asking you personally to do your best to help avoid this danger.
It is signed
Yours sincerely, C. Attlee.
The miners have given for this country for generations.
Conservative Members supported the attitude of the coal board and the Government towards the strike for 12 months, but they have the gall now to complain about the cost of the strike. We told them on numerous occasions what the cost would be. Conservative Members should think before they comment on the coal mining industry. They are talking about the £2 billion that will have to be invested in the industry, but much of that sum will be used to put right what was lost over the 12 months of strike.
When the Secretary of State opened the debate, he spoke of his regret that the strike took place. I do not know the extent of his regret. The Government knew what was happening in the industry and in mining communities over the course of the strike, but they chose to stay away from the problems. Apparently they wanted the hardship to continue and everything else that went with the strike. I do not know how those people can say now that they regret the submission of such a Coal Industry Bill.
The Secretary of State said that 1984 should have been a break-even year, and one of growing efficiency and productivity, and then he went on to comment on the "Plan for Coal". He talked about how much investment the Government had made in the industry, but I remind the House that, for all their talk about investment, since they came to power in 1979, the Government have opened only one coal mine. That is in the Vale of Belvoir. When the plans for that coal mine were first presented, there were to be three mines. The Duke of Rutland threatened to lie down in front of the bulldozers if the Government tried to sink those three mines in what he presumably believed to be his back garden, and stopped the plan. It is a great pity that he did not lie down in front of the bulldozers; if he had done so, we could have had all three mines, which will be needed by Britain in years to come.

Mr. Orme: It is not sunk yet.

Mr. Barron: I know that it is not sunk yet, but they have started it. We still await the fruits of the investment in new pits.
The Secretary of State also said that the industry, for one reason or another, had failed to meet the 4 per cent. a year growth in productivity that was agreed. I accept that, but there are many reasons why productivity has not increased since the "Plan for Coal" was introduced in 1974. We could have an all-night debate on that subject, and I am sure that many of my hon. Friends who have worked in the industry since 1974 could contribute to such a debate. But the Secretary of State omitted to mention the production targets contained in the "Plan for Coal". Indeed, during the strike, Ministers consistently forgot to mention them. They talked about the closure of uneconomic pits and the need to get rid of old capacity, but they never talked about the fact that the "Plan for Coal" would have meant that Britain would have been producing more than 125 million tonnes of deep-mined coal a year, whereas the reality is that, in the year before the stike, it produced less than 100 million tonnes.
We should examine that matter, because the coal board is talking about the new 25-million tonne capacity that is


coming on stream to replace old pits. The new capacity has started at Selby, which was a project started by the Labour Government. Selby uses high technology mining techniques, which means that it will need less labour. It is predicted that, when it is in full swing, between 10 and 12 million tonnes of coal a year will be produced by just more than 4,000 miners. At present, it takes about 10,000 to 12,000 miners to produce that amount of coal. The 25 million tonnes of high-cost capacity that Mr. MacGregor, even after the strike, said would have to go would mean the loss of more than 66,000 jobs. Those so-called high-cost pits are not all in areas that went on strike. There are many in the north and south Nottinghamshire coal fields.
There are two such pits in my constituency. Ministers talk a great deal about the NCB Enterprise Board providing jobs. One of the pits in my constituency will close in four years' time, and its closure has been accepted by the NUM. The other one should be workable until the next century. At present, unemployment in the village is 25 per cent. If the colliery is closed and work cannot be found for the people who work there now, the village will have an adult unemployment rate of about 50 per cent. That is unacceptable to me, and it should be unacceptable to any reasonable Government. I hope that if the Minister is considering closing old collieries, his scope will be much wider than the narrow scope talked about by the NCB and the Government over the past 12 months in relation to how they see the shape of the industry in future. It is not acceptable for them to do such damage to my communities if their projections for the coal industry are brought about.
The Minister talked about the NCB enterprise board. He said that it created 200 jobs. I am sure that I have no need to remind the House of this, but perhaps I should. The enterprise board was an afterthought. The Government were embarrassed about adding people to the unemployment list in mining areas, the vast majority of which have way above the national average of unemloyment anyway. The scheme was brought in in August last year at £5 million, and then the expenditure was increased to £10 million, months after the strike had begun. It has created 200 jobs. Possibly another 400 are now in line, and there could be 1,000 more after that. Therefore, perhaps in 12 months' time that £10million will have created 1,600 jobs.
I remind the Minister that many more people than that are unemployed in my constituency. I could do with the money in Rother Valley to get rid of current unemployment, let alone the unemployment that might arise if two of the six collieries close. The Government are going nowhere near to addressing the problems created by the closing of collieries. They should go away and consider multiplying the £10 million by the 650 constituencies represented by hon. Members, or at least constituencies with coal mines in them. We should look at the matter at that level before we do anything else.
In view of what has been happening over the past 12 months, I should like to consider certain payments about which the House is concerned, although they are not directly connected with the bill. Unemployment benefits are paid to coal miners who accept redundancy. For the first 12 months they can get unemployment benefit from the state, and-then a percentage of their take-home pay is made up by the redundant mineworkers pension scheme. Up to the end of 1985, that will be fine, but many people

are likely to be made redundant next year who, because of the strike over the past 12 months, have not been able to make national insurance contributions. In those circumstances, they will not be eligible to claim from the redundant mineworkers pension scheme. I ask the Minister to look at that. Perhaps the scheme should be altered so that those people will not lose benefit. I refer also to people claiming sickness benefit, who also have not paid national insurance contributions, although the case is not exactly the same. They might be affected under the sickness scheme under which employers have to pay.
I am pleased about the introduction of the Bill. However I echo the sentiments of my hon Friend the Member for Dunfermline, West. The Bill is specific about areas where money will be paid and used. We should have told the exact projections of the likely manpower loss in the coal mining industry because of the Bill. I do not believe for one minute that neither the NCB nor the Government do not have those projections. If they do not, how can they ask for specific amounts of money to go to the redundant mineworkers pension scheme? They must know. They should tell us. We who represent coal areas have enough problems with unemployment and the lack of job opportunities for school leavers and many others. We should know exactly what the future manpower losses are likely to be. The Minister must come clean about redundancies in the coal industry. He should make a statement to the House so that people can prepare themselves for the possible disaster.

Mr. Frank Haynes: My hon. Friend the Member for Rother Valley (Mr. Barron) has brought reality to the debate. He read a letter from Clement Attlee. I was one of the people he was talking about. I am proud to have made a contribution. I received a similar letter for my contribution to the mining industry.
What galls me more than anything is to hear Conservative Members talk about the mining industry when they do not have a clue what it is about. In the main, Tory Members are business men who are bothered about the profit motive. They are not bothered about the destruction of communities and jobs. They have destroyed jobs and communities ever since they came to office in 1979, and still they continue.
I argue not about the money provided in the Bill until 1987 but about whether the Bill prepares the way. We do not have short memories. I have a particularly long memory. I remember what was said by previous Secretaries of State for Energy about pit closures. When the NUM said some pits were on the closure list, the Government denied it. When we talked about 70,000 jobs going in one fell swoop, the Government denied that, too. We are now back to reality. The truth is out. What the Government said was not true is true today.
The Government say that management should run the industry. In the past we have run the industry together. We worked together from the first day of nationalisation. The previous owners of the coal industry received royalties even after nationalisation. It took a Labour Administration to stop that.
We appear to be returning to the old days according to what Tory Members say. They want the managers to have the big stick with which they used to belt our backs many years ago. They want to put the stick into their hands.
We understand what is happening. We have worked in the industry for a long time. We know what it is all about from A to Z. The Secretary of State is a new boy in this game. My hon. Friend the Member for Bolsover (Mr. Skinner) has been involved in the industry. The Secretary of State is interested only in finance and filling pockets with profits. We must consider jobs and communities. We must save, not destroy, the pits. Coking coal for Scotland has been mentioned. The tragedy is that the coking coal would have been available if the pits had been closed. I do not criticise the Conservative Government alone, because the Labour Government closed pits. However, it was a different ball game then. There were other jobs for people to take. Now, when a pit is closed, there are no jobs.
It is all very well for the Secretary of State or the Minister or Mr. MacGregor—a real butcher—to make suggestions. It is all very well to talk of making jobs available at other pits. There used to be nine pits in my constituency. Now there are five, and one of those will close in August. Another pit, in Broxtowe, will close shortly afterwards. The only work available for youngsters in that area is in the pit, but the shutters are being pulled down and the lads are not being taken on. They are on the dole, and we are paying them for doing nothing. I am not talking about school leavers joining the youth training scheme; I am referring to older youngsters who cannot get jobs at the local pit.
Those two pit closures in close proximity will cause a serious problem. I advised the chief executive of the district council to write to Merrick Sparton at Hobart house to ask for some of this marvellous enterprise money, with a view to dragging in some industry so that the youngsters will be able to get jobs somewhere. He wrote the letter, but he has heard nothing. We were told that £5 million was available; and a few days later we were informed that the amount was £10 million. It may be peanuts, but where is it? We need it in my constituency to provide some jobs.
I was a local branch official for many years at the pit where I worked. I was involved in building up industrial relations. The Government imported a fellow from the United States who destroyed the industrial relations in two years flat. For many years, the way in which management and men in the mining industry worked together was held up as an example to the rest of the nation. That situation has been totally destroyed. Man is fighting man and man is fighting management, and we are making no progress at all. In my years in the industry, we accepted mechanisation and lost coalface jobs as a result. However, the men were able to go to other jobs in the industry. We played the game from the first day, and the industry benefited.
My hon. Friend the Member for Rother Valley mentioned the letter in which Clement Attlee congratulated the miners. That was how things always were until 1972. There were no strikes between 1926 and 1972, when the Tory Administration of that time started to destroy the industry. The present Administration have continued the process.
The Government must try to understand the mining industry. We have heard about exports. We should remember that we import coking coal because we cannot produce enough. The pits that contain it have already been closed. We are paying for it through the nose, and that affects the balance of payments. An application has been

received from a European country which wants coal of all types—not just coking coal, but other types and qualities, too. I have heard nothing about that.
I believe that negotiations are going on with Romania. I was lucky enough to visit Romania for three days with Lord Wilson of Rievaulx. We went to see the President because he has an energy crisis on his hands. We came back with a deal. We put this to the Secretary of State and the chairman of the NCB in the hope that something could be done about Romania's problem, because we can produce the coal that that country requires. Romania made another suggestion. I should think that the Government will jump at this one. As regards those coking coal pits that have been closed, Romania has suggested to the Government and to the NCB that its people should come over here and open them up. I bet the Government will jump at that because it is a way of private enterprise coming in—not the British people, the British Government, the British mining industry or the NCB, but somebody from outside. If that comes about, it will at least mean that some jobs will be knocking around, and that is more than the Government are achieving.
The Government are bragging about what they are doing, yet the unemployment total continues to climb. The Government have to understand that the mining industry is, and has been for many years, the lifeblood of this country's economy. It is all very well for the hon. Member for Erewash (Mr. Rost), who has now left the Chamber, but he does not understand the situation either. All that he keeps cramming down my throat every time he speaks is PWR, but he does not realise how much that costs and the dangers involved in going ahead with more nuclear power stations.
We have had the co-operation of the mining industry and the people who work in it in modernising the industry, and that will continue. The miners have always accepted modernisation. Miners work together and, as I said earlier, they have worked with management. The Government have allowed the industry to be destroyed, and they have played a part in that by appointing that stupid American who came here supposedly to chair the NCB.
I understand the Bill, and in one way I accept it as a good thing. More money will come into the industry, but there will be a price to pay for that money coming in—the loss of more jobs. Fewer jobs will be available is the mining industry when we should be building up the industry. The work force is ready to move forward and to create a better, larger and more profitable industry.
I maintain that the mining industry has always made a profit. The interest rates have shackled the industry. Conservative Members may laugh, but they do not understand what I am saying. They have been in the House five minutes, yet they know everything. I am talking about an industry in which I worked, and I know what it is all about.
Then there is the question of the Duke of Rutland and Belvoir. When I attended a meeting in his castle one day, I was surprised to find that he heats the place with solid fuel. He has solid fuel under his feet; but he does not want to work it, and he does not want us to work it. When I was in the castle, I noticed that he had a whacking great fire and a wheelbarrow full of solid fuel to put on to the fire when the previous load had burnt itself out. He still burns solid fuel. I welcome that, because it is in the interests of the industry, and, after all, he is paying for it to the benefit of the industry.
I agree with some of the things that have been said by many of my hon. Friends. The Government are privatisation balmy. Make no mistake—they mean to privatise the mining industry. They are closing the so-called uneconomic pits, and, by their actions, they are making profitable pits unprofitable in preparation for what they want to do.
I appeared on a Central Television programme with the hon. Member for Erewash a short time ago to discuss the sale of pits. That is what the hon. Gentleman was pushing. Not long ago the Secretary of State for Trade and Industry was pushing for action in that direction. When prominent Tory Members talk like that, action is likely to follow in due course. It is obvious to many people—certainly to most on these Benches—that that is the direction in which the Government will be moving. If so, I assure them that we will put up a blooming fight—I almost used different language—against any such move. We shall defeat the Government not only on the sale of pits but at the next general election.

Mr. Allen McKay: I shall concentrate on some of the worries that exist in the aftermath of the strike. First, however, I shall comment on some of the criticisms that have been made about the Bill in general and, in particular, about the amount of money that it provides and the way in which the NCB has been financed.
We are talking not just of a subsidy to the mining industry but of subsidies to every industry that feeds on that industry, and some of the companies concerned are represented by Conservative Members. Many firms depend on the existence of a large and thriving mining industry.
I refer to companies which supply, for example, mining machinery, supports, conveyor equipment and belting, clothing for miners and safety equipment, including safety boots. If those companies did not have a mining industry to supply, they would have few customers. In addition, the NCB successfully exports expertise, such as management experts. Those experts advise other countries, and, in the process, the mining industries of those countries purchase their equipment from private manufacturers in this country.
It is sometimes forgotten that at the time of nationalisation, the NCB had to buy out the coal owners and for a long time pay them royalties. A great deal of mechanisation had to be undertaken because, under private ownership, the owners had let the industry run down to a dreadful extent. Indeed, that was why nationalisation came about; had the private owners been successful, there would have been no need for the pits to be nationalised.
Immediately after nationalisation, vast closures took place to bring the coal industry into the order that could not happen under private ownership. In other words, we had to create a viable industry out of the scrap situation that had been left by the coal owners, who had taken the easiest coal and left the most difficult. It is worth noting that that is the way in which the oil industry is going.
When coal was in short supply and it could have been sold at the market price—so that the industry could have been viable for all time—the Government stepped

in and said that it should not sell it at the market price. As a result, many companies can be said to have lived off the back of the mining industry. Money must now be ploughed into the industry to make up for what was taken out in days gone by. But investment takes a long time, perhaps 10 years, to work through. Much of the money goes into development capacity, and the coal resulting from that comes on stream in due course.
When the Secretary of State talks about its being impossible to stop miners from wanting to become redundant, he is running into a very dangerous situation. If he is going to take that attitude, what happens to a coalmine which is prosperous and could continue to be prosperous in the future if the men at that colliery decide that they want to go? Will that colliery close because the men have gone, because that is what the Secretary of State was saying?
Near my area, many years ago, Barnsley main colliery closed. Some of us wondered why, because there were quite considerable reserves at that time. It had probably the best contracts for workmen in the area, but it had industrial relations that left a lot to be desired. The rumour went round that there was a possibility that the mine would close and the men were encouraged to leave. It was said that the board would transfer them to where it wanted them to go and that if they wanted to choose their own pits it was time to go. So they left in droves and that colliery closed—just as the Secretary of State is predicting now—not because there were not the reserves there, not because it was not a good colliery, but because the men had been encouraged to go.
Now, Barrow colliery is to close and all the workings are to be taken over to Barnsley main colliery, which closed some 30 years ago and is now being reopened. So the things that were feared at that time were evidently true.
I am concerned about the NCB's reluctance to set up the new review body which it agreed on with NACODS. The reputation of the Secretary of State hangs on this, because in the debates during the strike he emphasised his backing for a review body of this type. It is a sad commentary on our times that the National Union of Mineworkers, NACODS and the British Association of Colliery Management cannot trust the chairman of the NCB.
The Secretary of State would do well to recognise this, because he is himself, I suggest, vulnerable. The chairman of the NCB was for the first time appointed not after discussions with the trade unions concerned, but by the Prime Minister; therefore, he no doubt has the ear of the Prime Minister. The Secretary of State probably did not get on too well with the chairman of the NCB during the strike and I would suggest that the chairman has a word with the Prime Minister and it may be that we shall see a new Secretary of State for Energy when the Government shuffle comes about.
Two meetings have taken place and the NCB is very reluctant to bring in the review body. It is also adamant that it will not go back to the old review procedure. I suggest that the reason for this is that it is thinking of the number of men it would like to lose and the number of collieries it would like to close. It would suit the chairman of the NCB to get rid of the men he does not want and to close the collieries he wants to close before he brings the new review procedure into being. This was behind the question that I asked the Secretary of State during energy questions, but to which I did not get an answer.
There is no trust and no co-operation, and these must be regained. We can only regain them in the present climate if the NCB gets a new chairman.
In the area that I represent, there is a strong rumour that the colliery of North Gawber is to close. It probably has another five years of life, but the strike is being used as an excuse to close it. The Houghton Dunsil seam is to close. It was the Dunsil seam which had transferred men from Wentworth Silkstone colliery on the understanding that, as it was a small colliery, they could work togeher in the seam and have the same atmosphere as they had had at the Wentworth Silkstone colliery, but the Dunsil seam is to close.
We understand that Woolley colliery, in which a massive washer for the west side has been built, is to cut its production. Those are rumours, but they have not been dispelled by the NCB saying whether they are true or not. The colliery review which is to take place will no doubt help to enlighten us.
The Secretary of State does not seem to understand the colliery review procedure. It starts well before a colliery closes, not when it is imminent, and not after the decision has been made. That gives time for the unions to send in their engineers and experts to see whether the board is right in its assessment, or to make suggestions about the retention of the colliery. It is no use having the review procedure if it is to look at a colliery's position after a decision to close it has been made.
There is a need for a strong and viable coal industry. The energy policy report of 1978 indicated strongly that the gas and oil reserves were becoming depleted. The oil industry recently produced a report stating that a critical stage has been reached in the development of Britain's oil and gas resources, and that production is near its peak and is expected to decline in the mid-1980s. To the end of 1983, 41 fields containing 13·3 billion barrels of liquid and 32·7 trillion cu. ft. have been committed for development. Oil and gas production from those fields will peak in the mid-1990s and then decline by 80 to 90 per cent. towards the end of the century.
The Government have to make up their mind. We can either have a viable coal industry which will help to support the lack of energy resources as they run out, or we can let the coal industry go and have to give strong support to the oil and gas industries. As the reserves run down, it will be necessary to go further afield into the sea to get the other existing reserves, which will be costly and probably have to be subsidised, or there will have to be a massive increase in the price of energy, which the country cannot afford.
Therefore, it is vital to consider the need for a viable coal industry. If the Government let Ian MacGregor have his way, we shall run into trouble in the year 2000 or 2010, because we shall not have a coal industry to sustain the depletion of oil and coal. It is a critical time, because the lead-in time is 10 years. We need investment in new coalfields. We need investment in the old collieries to sustain them. There is a great need to ensure that the coal industry is viable and, if possible, prosperous; but whatever the cost, there is need for a continuing coal industry, otherwise we shall be in trouble in the year 2000.

Mr. Michael Fallon: It may surprise you, Mr. Deputy Speaker, to learn that I have some sympathy

with the arguments that have been put by Labour Members, especially by the hon. Members for Wentworth (Mr. Hardy) and Ashfield (Mr. Haynes).
I compliment my right hon. Friend the Secretary of State and the Under-Secretary of State on the way in which they have conducted themselves during the recent strike. I think they were the first to recognise that the strike might continue for a very long time. Whatever their influence over the NCB, it was a benign influence, and the pace arid tone of the board strategy owed a lot to the way in which the Ministers conducted themselves. In my view, they renewed public faith in the role of Ministers during a dispute of this kind. Nevertheless, the ending of the strike presents to my right hon. and hon. Friends which have never before been presented to their predecessors an opportunity to think again about the coal industry.
I have to say something else which may surprise you, Mr. Deputy Speaker. If it were not for the Marxist purpose of the strike and the dictatorial leadership of the strike, I might well, if I had been a miner, been on strike. About 40 years ago the National Coal Board was charged with securing the efficient development of the mining industry. The board, I submit, is not simply technically insolvent but, far worse, is morally insolvent. In almost every year of the board's existence pits have closed and communities have been demolished. The hard-working, loyal miners whom the hon. Member for Rother Valley (Mr. Barron) praised so warmly have been condemned in every year of the board's existence to an uncertain future in an unsuccessful and loss-making industry.
I had hoped not for a Bill that would simply tackle the board's finances but for a Bill that would revitalise and modernise the industry. I had hoped that in return for the huge sums of money that the taxpayer is pouring into the coal industry a medium term coal mining framework would be established within which the mineworker and the taxpayer could be provided with answers to pertinent questions. Why is coal mining the only unprofitable extractive industry in Britain? Why does it continue to lose money and markets? Why does it continue to lose jobs? I should have thought that, in return for the huge sums of money that are demanded of the taxpayer, at the very least there ought to be evidence of a more radical approach, not just in terms of finance—why has the NCB not been devolved, why has its centralised, decision-making structure not been split up, why has it not copied the. example of the National Union of Mineworkers and moved away from its close proximity to Buckingham palace to the heartlands of the mining industry and why has private capital not been attracted into an industry which could be profitable—but in terms of those areas away from the deep mine collieries that are of enormous importance to the industry.
In the case of small mines, the section 36 savings provided for in the Coal Industry Nationalisation Act 1946 ought to have been abolished years ago. Certainly they ought to be reviewed. In return for these huge sums of money I should have thought that at the very least my right hon. and hon. Friends ought to say that the section 36 savings were on the table for review.
I should have thought that Ministers would now be able to promote and encourage small mines, in the same way as other Ministers promote and encourage small businesses. I also thought that we might have heard a little more about opencast mining. You, Mr. Deputy Speaker, will be more aware of the facts than many other hon.


Members, because of the situation in county Durham. We tend to forget that opencast mining is not merely profitable, but very profitable; in the last proper years for which the NCB has furnished accounts, it made a profit of at least £200 million.
The capacity in opencast mining is not being developed. Throughout the strike, and even today, there has been a virtual freeze on opencast mining, particularly in the north-east of England. The NCB does not appear to be granting licences—certainly not a flow of licences—and the county councils, especially those that are Labour controlled, refuse time and again the planning permission required by operators who have won licences.
The situation in the north-east is serious. Opencast mining is a large employer there. It employs at least 2,000 people directly—including a small number of my constituents—and many thousands indirectly. It provides cheap coal and provides it locally. I shudder to think what might have happened to some of our industrial plants in the north-east during the past year—you, Mr. Deputy Speaker, will know of as many examples as I do—if opencast mined coal had not been available.
Opencast mining is an important part of NCB activity. It contributes formidably to the board's revenue through the royalty system, provides additional employment at a time when jobs are being lost elsewhere in the board's activities, and provides cheaper coal to those who need it.
I thank my hon. Friend the Under-Secretary for the attention that he has been giving to this matter, but it is time that we had a thorough review of opencast mining. The money being voted in the Bill will be wasted and will not further opencast mining. We need a review of legislation, of the strategy for opencast mining and of its financing.
It is nearly 25 years since the principal Act was passed. I submit that the quantity controls on opencast mining can no longer be justified. Indeed, even the geological isolation requirements on opencast mining can no longer be justified. We require new guidance to local authorities on planning applications. If counties such as Durham—almost a wholly owned subsidiary of the NUM—are to refuse planning applications as a matter of policy and every application goes to appeal, the Department of the Environment must give clearer guidance about the criteria that should govern consideration of such applications.
As for the strategy for opencast mining, we need a much higher production target. Without any effect on the rest of the NCB's finances and major strategy, production in opencast mining could be increased dramatically. Half as many tonnes again could be produced with little effect on deep mining.

Mr. Woodall: Will the hon. Gentleman give way?

Mr. Fallon: No; I am about to conclude.
As for financing, given that the Opencast Executive is highly profitable and has a good future, it should be liberalised and eventually privatised. With sharper management and a much more liberal framework, there is no reason why the Opencast Executive should not, within the lifetime of this Paliament or certainly the next Parliament, become the Opencast Mining Company.
I should have hoped that the Government would not come to the House yet again asking for unlimited funds to meet the deficit and increase the borrowing powers of the

NCB. I should have hoped—and I still hope for this from my hon. Friend the Minister when he winds up the debate—for a broader view and a further vision of how to make this industry profitable and, above all, how to serve the interests of those who work in it and extend to them a more certain, secure and profitable future than that which now stretches before them.

Mr. John Home Robertson: The hon. Member for Darlington (Mr. Fallon) began by trying to sound reasonable but did not take long to revert to type. He gave us an interesting foretaste of the brave new county Durham of years to come if the Tories have their way, with unlimited privatised open-cast mining. If the hon. Gentleman is preaching that message in Darlington, we can confidently look forward to the return of Ossie O'Brien to the House—and the sooner the better.
Some serious points were made earlier in the debate by Conservative Back Benchers, all of whom complained about subsidies being paid to the coal mining industry. In the inevitable banter that takes place in debates such as this, several of my hon. Friends commented that the agriculture industry certainly gets its fair share of subsidy, if not more than its fair share.
I have the privilege of representing a very mixed constituency in which both mining and agriculture are significant. One of the great differences between Socialists and Conservatives is that Socialists believe in sustaining key industries where that is necessary for the sake of the industry and of the communities in the areas concerned. That applies as much to agriculture as it does to coal mining.
Coal is a key strategic industry for this country. In an energy-hungry world it is a foolish nation which, having the resources that we have, allows them to fall into jeopardy as the present Government have done. Anyone who does not recognise the case for coal should see the power station sites in the United States originally intended for pressurised water reactors but increasingly being converted to coal-fired stations. That speaks for itself and that is where the future lies for this country, too. I am certainly convinced of the long-term case for coal in this country; and the Government stand condemned for putting that key industry in jeopardy.
The Bill is supposed to be about the long-term future of the coal industry. As my hon. Friend the Member for Dunfermline, West (Mr. Douglas) has said, there can be no realistic prospect for good performance in the coal industry while the present stupid provocation continues at many pits in this country and especially in Scotland. I listened with interest to the comments of my hon. Friend the Member for Ashfield (Mr. Haynes) about the long history of good industrial relations in the coal industry, but I have bad news for him. The bad news concerns one job loss in my constituency with which I am prepared to live—that of Mr. Albert Wheeler, director of the national Coal Board in Scotland, who I understand is being transferred to Nottinghamshire. If my hon. Friend thinks that there has been reasonable industrial relations in his part of the world in recent years, I fear that he will be disappointed soon because of the havoc that Mr. Wheeler will be wreaking in that neighbourhood.
There can be no prospect of trust or good faith in the mining industry while 200 Scottish miners remain locked out after the year-long dispute. On 5 March the Prime


Minister said on three separate occasions during Prime Minister's Question Time that those miners who had been sacked throughout the country, with particular reference to Scotland. were guilty of serious criminal acts.
Seventeen miners in my constituency have been sacked. I shall refer to a few of them at random. Mr. Billy Davidson of Prestonpans served the industry for 11 years. He is married with two children. He was convicted of a breach of the peace and fined £50. He was sacked and now faces long-term unemployment. Stuart Shepherd, also of Prestonpans, served seven years with the NCB. He was charged with a breach of the peace, fined £30, sacked and now faces long-term unemployment. William Cockburn of Tranent served for 16 years, was fined £50 for a breach of the peace, and was sacked. Mr. Derek McLeod of Prestonpans was charged with a breach of the peace, fined £50 and sacked. That is a particularly interesting case because Mr. McLeod was a member of the specialist mines rescue team. He was called upon by the NCB on a number of occasions to do dangerous and arduous work rescuing some of the pits affected by fires during the strike. He had just returned from one job in Fife—some way away—when he found that he had been given notice that he was to be sacked.
My final example is Mr. John Glen of Musselburgh, who had 34 years of unblemished service in the industry. He is a married man with two children. He was charged with a breach of the peace, was admonished by the court and was sacked.
If all those people are guilty of serious criminal acts, there are many people in this country who are serious criminals. A significant number of young Conservatives must be serious criminals. Probably a significant number of English football supporters are serious criminals. Are they to face long-term unemployment because of minor breaches of the peace on football terraces? It is an obscenity to talk in those terms.
What did the Prime Minister say when we drew her attention to the people who she said were guilty of serious criminal acts? She told us to go to the NCB. As my hon. Friend the Member for Dunfermline, West (Mr. Douglas) said, we went to meet Mr. Wheeler, Mr. MacGregor, the Secretary of State for Energy and the Secretary of State for Scotland. They said that they gave us their sympathy. Mr. MacGregor led us to believe that we had made a powerful case that would be considered. But no, Mr. Wheeler stuck to his guns and these men remain sacked.
The Prime Minister says the men should go to industrial tribunals. They are doing so, but, unfortunately, industrial tribunals have no power to remedy cases of manifest injustice. It will not do. We have heard talk of ratting and twisting during the past couple of days—what the NCB has done to those people can be described in much stronger terms.
It is interesting that many representatives of bodies of public opinion in Scotland have been lending their support to miners who have been sacked manifestly unjustly. They include the chief constable of Lothian and the Borders, the police force which covers my constituency. He has said that in his view the cases of the sacked miners should be reviewed. Presumably, like most respectable policemen, he believes that it is for the courts to punish those who are guilty of having committed offences and that the coal board should not punish them as well. The churches have supported the sacked miners. The hon. and learned Member for Perth and Kinross (Mr. Fairbairn) had the

courtesy to listen to some of the sacked miners at a recent meeting of the Scottish Grand Committee in Edinburgh. He said that he was concerned at what had happened.
Most recently, I read in today's edition of The Scotsman that Princess Alexandra is joining the chorus of those who are concerned about the miners who have been sacked unjustly. It is reported that
the princess met some of the miners during the strike who volunteered to act as labourers to complete the conversion of two buildings bought by the Leukaemia and Cancer Children's Unit Fund (Scotland).
One of the volunteers who worked long hours on that job during the strike was a constituent of my hon. Friend the Member for Midlothian (Mr. Eadie), Mr. Frank Barr of Mayfield. He spoke to the princess yesterday in the course of the opening ceremoney. He said:
I told her that the volunteers from the Dalkeith miners' strike centre were back at work and how I was the odd one our. She wished me the best of luck and hoped that I would be back at work soon.
Amen to that. We even have royalty supporting these miners.
These dismissals are in fact and in effect illegal under the terms of the nationalisation Act 1946. There is a conciliation procedure for dealing with such cases, and it is a crime that the coal board and the Government are not allowing conciliation to take place. It is a scandal that sacked miners have been victimisd in such a manner. If there is to be any future for the industry, these men must be allowed to return to work alongside their colleagues. I want a secure future for the nation and its key industries, including the mining and energy industries. I want to see investment in the future of the mining industry. Massive resources such as those off the coast at Musselburgh bay in my constituency must be developed. We need a future for the industry and we need justice for it. The Bill is a gesture in that direction, but we must go much further.

Mrs. Ann Clwyd: I agree with the hon. Member for Darlington (Mr. Fallon), who is no longer in the Chamber, that uncertainty and doubt surrounds many of our coalfields. The sense of insecurity is to be found especially in the South Wales coalfield. a appears to have been encouraged deliberately by the Government and Mr. Ian MacGregor, who seem to relish its existence as a political weapon with which to punish the South Wales coalfield for its extraordinary solidarity and strength during the strike.
The people of South Wales deserve better than this. Government cliches about the need for industrial harmony rightly fall on deaf ears when men and women sense that their manufacturing jobs are being eroded by short-sighted economic policies and mean-minded political bias. The British Steel Corporation, the Central Electricity Generating Board and other major customers owe it to the people of Wales, who have sustained them for so long, to drop the absurd pretence and secrecy, and in so doing allow vital long-term planning to take place in a civilised atmosphere of reasonable security.
The Financial Times commented last week that there is a difficulty because the profitability of coal depends heavily on the prices paid by its large domestic customer, the CEGB. No one can deny that it is within the power of Ministers to lean on the CEGB to ensure that the prices paid are consistent with the coal industry's break-even point.
South Wales has been told that it will not receive capital for major projects such as replacing capacity in new mines until it has wiped out its overall losses, which by March 1983 amounted to about £100 million. But the area is in a catch-22 position. South Wales cannot cut its losses if it continues to mine coal in out-dated units, using inferior machinery operated by an undermanned work force. Yet the beneficial effects of investment on production are obvious from the performance of collieries in the so-called central block areas.
It is clear that where greater mechanisation and proper transport have been introduced, performance improves dramatically compared with pits which have suffered from investment starvation, as have most of the pits in south Wales over the years. If the National Coal Board and the Government are to be taken at their word, the coalfield must retain sufficient capacity to produce 7 million tonnes of deep-mined coal. At present, production is unlikely to reach that target, and the shortfall in deep mine production could range from 0·4 million tonnes to 1 million tones.
Some of the shortfall will be made up by the lifting of pithead stocks, by licensed mine and open-cast production and by retrieved coal from tip clearance, but it is difficult to see where the extra capacity to make up the 7 million tonnes will come from. To speculate which pits are likely to survive is to dodge the problem of understanding that we have not benefited from the massive reconstruction which some areas have undergone. To win new markets and to meet the demand of existing ones we need the sort of money currently being spent on one airport in the Falkland Islands—about £0·4 billion.
The present choice of financial priorities is a perversion of business logic and a clear sign of the absence of any awareness in the Cabinet or in the Welsh Office of the plight of coal fields such as south Wales. To talk, as the NCB is talking, of having sufficient markets to warrant 7 million tonnes of deep-mined coal a year, when our pits are unlikely to produce 6 million tonnes a year by 1986–87, is nonsense. We need immediate and major reconstruction of a large percentage of our existing deep-mine capacity. We need a massive overhaul of our transportation and coal preparation facilities. We need two or three new mines. There is a possibility, if the Government would use a little imagination, of making several radical departures from past practices to supplement production and mining employment.
For example, it would be possible to carry out a rapid feasibility study into the prospect of sinking as many as 10 or 15 small drift mines into the upper seams. They could provide a swift profit—the Government are fond of talking about profits—on a fairly small investment, and would provide up to 750 new jobs in the south Wales coalfield. Almost 100 licensed mines operating on a similar scale in the upper seams of south Wales in 1985 are giving their owners a good return on their investment and labour. Why should not the NCB or workers' co-operatives share in the fruits of those ventures?
To take the most optimistic predictions for the south Wales coalfield up to 1988, if present trends continue and the downward spiral of mining production and employment is unchecked, by April 1988, NCB South Wales is likely to be employed at the most 12,800 deep

miners, producing about 5·8 million tonnes of coal. That would mean the closure of 13 units, the loss of 1·2 million tonnes of capacity and the shedding of 6,000 jobs.
On the pessimistic scenario, worrying noises are coming from Brussels. I am not satisfied with the assurance given by the Secretary of State that there is nothing much in the Commission's proposals. Commission proposals that we have heard about them in the past, and that I was involved in discussing when I was in the European Parliament, have subsequently come to fruition. We want an assurance from the Secretary of State that he will definitely veto those proposals if they ever come before the Council of Ministers. If the proposals were to come to pass, the south Wales figure would fall to 9,500 directly employed in just nine pits producing around 4·7 million tonnes a year. It would mean the closure or merger of 17 units, the loss of some 2·3 million tonnes of capacity and shedding of 9,000 jobs.
Both those scenarios—the optimistic and the pessimistic—assume that the Margam coking coal mine will be sunk, employing some 750 men producing around 600,000 tonnes of coal. That is an optimistic assumption which given the prevailing political and economic climate, appears less grounded in reality as each day passes.
We in south Wales need greater investment in new mining capacity and equipment, and an end to deliberate manpower shortages in south Wales pits. We must have our fair share of the new technology to avoid experiencing an even swifter widening of the performance gap between south Wales pits and central block pits that is occurring now.
Like my right hon. Friend the Member for Blaenau Gwent (Mr. Foot), I remember the experience that we had in south Wales with Mr. Ian MacGregor as chairman of the British Steel Corporation. I remember going to see him as a member of the European Parliament to argue for a slower run-down of the steel industry in this country. The run-down was accelerating at a faster pace in this country than in any other country in the EEC. When I reminded him that part of the EEC treaty of Rome argued for such a thing as social policy when we were running down our older industries, he turned to me and said, "What is social policy?" He neither knew nor cared. That is also the situation in the coal industry.
While the Secretary of State and his colleagues talk about reconciliation in the coal industry after this damaging strike, which was exacerbated by the actions of his Government, I remind him that five men in my constituency were sacked eight weeks ago for allegedly spitting at the one miner out of 6,000 who worked through the 11-month dispute. Two of those men were not even present when the alleged incident took place. They were sacked on the say-so of one man—they were sacked on the say-so of the chairman of the National Coal Board. Eight weeks later their appeal has still not been heard. I ask the Secretary of State to ensure that that appeal is heard as swiftly as possible.
While such injustices as that prevail in coalfields such as south Wales and elsewhere in Britain, there can be no reconciliation in the coal industry. I ask the Secretary of State to use his good offices to ensure that those men's appeal is heard as swiftly as possible.

Mr. George Foulkes: I am pleased to follow my hon. Friend the Member for Cynon Valley (Mrs. Clwyd). I shall come to the point about sackings on which she ended her speech.
I thank you, Mr. Deputy Speaker, for the opportunity that you have given me to say a few words in the debate. Patience is eventually rewarded. It is appropriate that we are taking the Bill into the night shift because that is what coal miners do. It is what many of my constituents do day in, day out, week in, week out, to provide the coal that the nation needs and will continue to need.
Most of the weak-kneed flaccid specimens on the Government Benches have not managed to remain with us. I give credit to the hon. Member for Sherwood (Mr. Stewart) who is still with us. It is notable that the hon. Member for Leicester, East (Mr. Bruinvels), who is always determined to get to his bed early, is not here. We heard a lot from the right hon. Member for Plymouth, Devonport (Dr. Owen) during the strike, but he has not been present for one moment during our debate.
We are talking not only about future investment in the industry, but about the cost of the dispute. The dispute was unnecessary, and it was engineered by the Government. Anyone who read the article in The Economist knows that the present Secretary of State for Transport was the principal architect of the dispute—[Interruption.] The Secretary of State for Energy, as usual, rollicks with laughter. He is well-heeled and can afford to do that. We know how the plan was engineered, how social security benefits were undermined and how trade union legislation was changed deliberately to deal with the dispute.
During the dispute I was with my constituents on the picket lines. I went regularly to the strike centre and spoke at meetings. I make no apology and I have no regrets.
I say to the pundits and to the punters, "Do not make any political or industrial assessment of the outcome of the dispute too soon. Let us see what happens in the next two years." I think that something unexpected by Tory Members will take place.
A strong commitment to coal has been made in the debate. Many of my colleagues have worked for years in the coal industry, and, unlike Tory Members, they know what they are talking about.
I shall comment on some ideas expressed by Conservative Members, starting with the hon. Member for Sherwood, since he has had the courtesy to remain in the Chamber. Recently I saw the headline, "Andy Stewart to Retire." Unfortunately, that referred to the excellent Scottish singer rather than the not so excellent Scottish Member of Parliament. The Register of Members' Interests provides a clue to the hon. Gentleman's commitment. He declares that he owns Beesthorpe Manor Farm, Newark. He therefore receives a great deal of public money in subsidy. Unlike the poor mining lads in his constituency, how much did he receive in 1983 in guaranteed payments, compensatory allowances and other subsidies?

Mr. Andy Stewart: Britain's three major industries are agriculture, steel and coal. The highest subsidy per employee goes to the mining industry, the second highest to steel and the third to agriculture. That is the truth. Subsidies to any industry are for the benefit of consumers, not of those who work in the industry.

Mr. Foulkes: That does not answer my question, the hon. Gentleman protests and gives wrong statistics, as other Gentlemen farmers know.
Let us consider what other Conservative Members have said and discover where their real interests lie.
The hon. Member for Erewash (Mr. Rost) is a director of Northcott Investments Ltd. and Penrhos Electrics Ltd., and investment adviser to General and Overseas Trust Ltd., parliamentary consultant on energy matters to Associated Heat Services, to the Warmer campaign and to Weleda United Kingdom Ltd. Those are not the types of jobs that miners can pick up; they are picked up by hon. Gentlemen who are part-time Members—who are elected to represent the interests of their constituents but who look after their own interests.
The real interests of the hon. Member for Ludlow (Mr. Cockeram) lie not in the coal industry, but in his directorships, his employments and his profession——

Mr. Deputy Speaker (Mr. Ernest Armstrong): Order. The hon. Member must relate his remarks to the Bill, or what ought to be in it.

Mr. Foulkes: Conservative Members call for the privatisation of the coal industry and the opencast mining industry. The hon. Member for Ludlow paid a flying visit to Namibia, sponsored by Rio Tinto Zinc, which has an interest in privatisation.
I can see that Conservative Members do not like what I am saying. Many of them are involved up to their necks in businesses that take advantage of the coal industry. If there is privatisation of opencast coal mining, Conservative Members will benefit. The public should know where those hon. Members' real interests lie. I am speaking of the Flash Harry types who spoke earlier in the debate.
The coal industry will never recover fully while the bitterness of the sackings remains. The same problems exist in my constituency as in those of my hon. Friends. The aftermath of the strike is bitterness indeed. Whatever the managers may tell us, neither productivity nor morale will recover fully unless there is justice, fairness and honesty in the management of the industry. None of those qualities has been evident in the sackings.
I wrote to Mr. Albert Wheeler, the NCB director in Scotland. He asked me how I could justify the reinstatement of men who had been guilty of acts of sabotage or serious offences but it is not true that most of the sacked men had been guilty of such offences. As my hon. Friend the Member for East Lothian (Mr. Home Robertson) said, more than 200 men have been sacked; yet I had an answer from the Solicitor-General for Scotland to the effect that only just over 30 miners in the whole of Scotland had been convicted of offences that could even remotely be considered serious. Seven had been convicted of assault, some of possessing dangerous weapons and some of other offences. Where are the acts of sabotage among those 200 men? I asked Mr. Wheeler if he would say which men had been involved in serious offences or acts of sabotage. I have had no reply.
There is a vendetta against certain activists. Union activists have been picked out. We see that happen in totalitarian countries. We see it happen in Latin American dictatorships. I never thought that we would see it happen here.

Mr. Home Robertson: My hon. Friend asks about sabotage in the Scottish coalfield. There have been acts of sabotage. There was, for instance, the flooding of Polkemmet. That sabotage was not the responsibility of any NUM member; it was probably the responsibility of Mr. Albert Wheeler.

Mr. Foulkes: I accept that point. I shall not elaborate on it.
Mr. Wheeler told me in his letter that the men could seek redress through industrial tribunals. Apart from the time that it takes to go to an industrial tribunal, and the fact—as was mentioned by my hon. Friend the Member for Dunfermline, West (Mr. Douglas) and has been argued on occasion by my hon. Friend the Member for Midlothian (Mr. Eadie)—that the conciliation procedure has been bypassed entirely, I asked Mr. Wheeler whether a man who went to the industrial tribunal and was cleared would automatically be reinstated. The answer was no. What sense and justice is there in that? That is what the men in Scotland are having to face. While that situation continues, there will be no reconciliation in the coalfields. That is typical of the negative and devious attitude of the management of the coal industry in Scotland in the last few years.
I shall give one other example of deviousness. It is a case study in deviousness in the NCB workshops at Lugar in my constituency. We suspected that the NCB might be planning to close it. The board deliberately let it run down, all the time maintaining that it had no plans to close it. By encouraging transfers and voluntary redundancies, the board got it down to a level at which it was no longer viable and could no longer continue, and closure then became inevitable. The board then said, "What can we do? We do not have the men; they have all moved elsewhere." But the board did that deliberately.
Let me refer next to the future for Ayrshire coal. Ayrshire coal at the time of nationalisation was mined in over 40 pits in the great Ayrshire coalfield. When I became a Member of Parliament, there were still four pits open. Now there are two open, and two with an uncertain future—Killoch and Barony. At Killoch and Barony, all the faces are back at work, and have been for some weeks. Those are the pits that in the course of the strike the management said were devastated and would take months to get back, yet they were back quickly, proving that that was a scare story by the management during the strike. Now we are getting stories from the NCB again showing its deviousness and negative attitude. We are told that Killoch and Barony have geological difficulties. My God, they are not new. By their nature, there have been geological difficulties almost since the earth began—at least for hundreds of thousands of years.
I spoke to the Parliamentary Under-Secretary about Killoch and Barony, and, to be fair, he was reasonable and helpful. I know that the Parliamentary Under-Secretary says that each individual pit is a matter for management decision. We are talking now about the money that is available and the strategy for the coal industry. The hon. Gentleman said that one of the Government's criteria for keeping pits open was that there should be a market for the coal. Even the chairman of the NCB has said that. My hon. Friend the Member for Cynon Valley and I had a discussion about this the other day. The coal in Wales and in Ayrshire is of high quality. It is low in chlorine and in sulphur. Therefore, it is the best quality coal

environmentally. There is a market for that coal. The NCB and the Government agree that there is a market for it. Nevertheless, the director of the NCB in Scotland has made the ridiculous, divisive, negative and devious statement that he can guarantee the future of Killoch and Barony for one year only. I ask the House to imagine the effect of that on the morale of the work force and on people contemplating the future and what they are going to do. It is a guaranteed death sentence—not an immediate death, but a slow. lingering death. That is the kind of attitude that we are facing.
I hope that the Parliamentary Under-Secretary will give some pledge to reconsider this matter. Perhaps he can tell us the position, particularly with regard to Kilroot power station. To give some credit to the Government and the the chairman of the NCB—he has not had much tonight—the chairman has been trying to get Kilroot power station converted to coal so that it can take Ayrshire coal.
We need a commitment about the future of the Ayrshire coalfield. It would be catastrophic if Killoch and Barony were closed, because there would be no coal mines in the whole of the west of Scotland—in the whole of Strathclyde. Already the Lanarkshire coalfield has gone. About 4,000 men are employed in mining in the region five years ago. The number is now down to 2,300. That is how many jobs we must replace already.
If those pits were closed, what would happen to those 2,300 men? There are not many jobs nearby. I am sure that my hon. Friends the Members for Dunfermline, West and for East Lothian will confirm that there are no jobs available for the Ayrshire men in Lothian and Clyde. So where will they be transferred? In addition, what future do the young people have? They have seen the coal industry in Ayrshire as their only, or almost their only, opportunity for a job. I am unable to convey to the House the sense of aimlessness and hopelessness among the young people.
In answer to a recent parliamentary question from my hon. Friend the Member for Blackburn (Mr. Straw), it was revealed that whereas the Prime Minister spends days and weeks, even months, abroad, she does not spend much time visiting the regions of the United Kingdom, seeing the problems at first hand. I hope that I have conveyed to the Minister the sense of frustration, aimlessness and hopelessness among the youngsters in areas such as mine.
My hon. Friends have described the amount of money that is being put into NCB (Enterprise) Ltd. as peanuts, and they are right. The leader of the SDP has tried to claim that he thought of the idea of NCB (Enterprise) Ltd., but I am sure the Minister will confirm that for some years many people have suggested that type of operation. Cumnock and Doon Valley district council suggested the establishment of such an organisation some years ago, and I recall writing to the Department on the subject.
Ayrshire is a traditional coal-producing area. If Killoch and Barony were closed, we should have to import coal into the area for the concessionaires. Even more important, we should have to import coal to fuel the boilers of schools and houses. Ayrshire county council made sure that the boilers for which it was responsible were coal-fired because of its commitment to the coal industry. It would be ironic and catastrophic if that situation occurred and we had to import coal.
I am worried about the fact that sometimes the management of a nationalised industry does not demonstrate a commitment to the future of that industry. It seems sometimes that those concerned do not want to


make a success of it. I shall give a recent example of a contract to transport coal from Knockshinnock in my constituency to Longannet. It was an interesting case, and at the time some of my hon. Friends and I kicked up a terrific fuss about it.
In that case, a £3 million contract—it was said to be the first of many other contracts that would follow—was awarded to the South of Scotland Electricity Board, a nationalised industry, over the telephone, within three hours, to Yuill and Dodds and two other firms in a consortium.
The first protest against the award of that contract came from a company named Wilsons of Coylton. Mr. Wilson is a rich man who lives in the constituency of the Secretary of State for Scotland. All his employees live in my constituency, which is a revealing fact in itself. Mr. Wilson complained because not only was he given a different mileage for the contract, but he was not given an opportunity to form a consortium.
Not only was that huge contract awarded over the telephone, but I now discover something even worse than that. There was collusion between the Secretary of State for Scotland and the electricity board over the award of that contract to make sure that the railways were not allowed to participate. I have a copy of a letter from Donald Miller, the chairman of the South of Scotland Electricity Board, to the Secretary of State for Scotland, in which, referring to a discussion between them, he says that one reason for rushing the contract through and doing it on the telephone was to keep British Rail out.
Is that not crazy? How are we going to get nationalised industries to make a profit if they are not allowed to compete for contracts of this kind? Hon. Members know about the environmental impact of hundreds of Yuill and Dodds lorries careering along the roads of Strathclyde, making holes in the road, with all the cost that that involves for the local authority, and with dirt coming off the lorries, quite apart from the immorality of keeping out British Rail. I hope that the Secretary of State and the Under-Secretary of State will look into that, find out why there was this collusion, and perhaps make a statement about it.
With reference to the point made by my hon. Friend the Member for Cynon Valley about the EEC proposal, again today, as at Question Time on Monday, Ministers pretend that they know nothing about it; they claim ignorance of the Commission's proposal. I find it impossible to believe. First, Lord Cockfield is a Tory member of the Commission, so they ought to know exactly what is going on. If not, they are incompetent.
I suggest that the Ministers do not know what is going on. They know that the Energy Commissioner has made a devastating proposal and that it has been thrown back by the Commission. However, knowing what happens in the EEC—and I have got to know it in the last year—we shall see that coming back again and again, and the coal mining industry in Britain will suffer. I hope that the Under-Secretary of State will give the reassurance in his reply that the Government will have no truck whatsoever with this proposal from the EEC Energy Commissioner.

Mr. Barron: Does my hon. Friend agree that the EEC ought to be using more British coal than coal from other parts of the world? The EEC imports over 18 million tonnes of coal each year from South Africa. That is immoral at the present time when South African miners are

being shot because they will not accept contracts that are being forced upon them by the companies working there. Does he further agree that, if we are really partners in Europe—something I am personally very sceptical about—we ought to be selling British coal to that market?

Mr. Foulkes: My hon. Friend is absolutely right. Would it not be marvellous if the EEC had as its priority not a common agricultural policy but a common coal policy? Then we would see some commitment, and perhaps some Opposition Members might have a bit more sympathy with European co-operation.

Mr. Hardy: Would my hon. Friend care to remind the Minister that, as I understand it, the Italian Minister of Agriculture, keen to serve his national purpose, is urging the EEC to ensure that all schools in Europe encourage the consumption of wine? I do not think that he has gone so far as to demand that wine be given out free in schools, but he has come very close to that. If he can serve the interests of wine producers in Italy, surely the very valuable role of coal in Britain could be served if our Minister took a leaf out of his book.

Mr. Foulkes: I am grateful to my hon. Friend and glad that he came to that conclusion. For a moment I thought that he was going to say, "Let them eat coal." We do not have enough pregnant women around to make that a profitable enterprise.
My hon. Friend the Member for Rother Valley (Mr. Barron) raised the question of imports, It is not just the EEC. I hope that we shall have a clear indication that the Government have done something to curb imports. I hope that we shall have a categorical guarantee that the Government will not import any coal whatever from South Africa.
I hope that we shall have an indication of what future investment there is to be in Scotland. What is to happen to Happendon? What is the future for Canonbie? Where are the future Scottish coalfields to be? Is there to be a future for the Scottish coalfields? What I hear from the NCB and the Government makes me pessimistic. The only suggestions appear to be for a major opencast development. We heard that from the hon. Member for Darlington (Mr. Fallon).
Let us not forget the environmental impact of opencast mining. Let us not forget the promises that I and other hon. Members have received—that if the local authorities agreed to the development of opencast mining, it would be a quid pro quo for the continuation of the deep mines. I had a promise in my own constituency that we would see Sorn and Highhouse pits maintained if opencast was allowed to develop, but the opposite was the case. Instead of being complementary, they became competitive. and the pits were closed down.
I join my hon. Friend the Member for Easington (Mr. Dormand) in commending the work, the plans and the proposals of the communities' coalfields campaign. Those are from local authorities which know the coalfields and the miners. Unlike Conservative Members, they feel for the future and want to participate in a future for coal.
There is—there must be—a future for coal in Britain. If the Government do not indicate it, then after one or maybe two years, when there is a general election, we shall see the return of a Labour Government and of a positive commitment to coal.

Mr. Alexander Eadie: I heard some comments about the wind-up speeches being on the night shift, and that has proved to be the case. I do not think we should be too fussy about that, because this is an important subject, it is an important Bill, and it deserves argument and debate.
In the debate, points were raised which, in relation to the history of our country and the history of the coal mining industry, are well worth studying. My hon. Friend the Member for Blaenau Gwent (Mr. Foot) mentioned a former Member of this House, Billy Blyton, how he had been victimised and the struggles that he had. Billy Blyton served all his life in the mining industry and he had a favourite phrase. It was, "I was a miner by profession and I am now a Lord by accident." We are pleased to see that he is still in the House of Lords.
In looking back at the history of the industry we should think of another person, and I say this particularly to the hon. Member for Sherwood (Mr. Stewart). I refer to Lord Taylor of Mansfield, a former Member of this House. Indeed, he wrote a book which all hon. Members of this House should read, because it would give them a general feeling for the background to the debate.
I became a little annoyed—I apologise to the House—because someone was giggling when my hon. Friend the Member for Hemsworth (Mr. Woodall) was talking about the tragedy he had when his father broke his back in 1926, and about his mother's struggles. That tragedy reminds some of us of our own personal experience. I cannot approach these matters without feeling emotionally involved, because I am the son of a victimised miner. When filling in a nomination paper, I recalled that I started in the coal industry in 1934. I remember my father being victimised in 1926. I often say that I was not brought up; I was dragged up. When I started in the pits in 1934, my father was still going into the pits. I managed to get a job in the pits because the lad whose job I got—he was a bogie driver—had been killed the week before. I worked for about 18 months before my father finally got back to the pits, between 1926 and 1935. He was victimised throughout. I am very proud of my father. Each of today's victimised miners is as good as ever my father was.
Although the Bill deals with the provision of money, we must not forget the future consequences of the strike for the industry. The Opposition have tried to make the point throughout the debate that we are talking not simply about money but about the future of the industry and how it can return to sanity in terms of better industrial relations.
The Bill is the consequence of what the present chairman of the National Coal Board described as "a little local difficulty outside of town." That remark alone should have ensured his dismissal for monumental incompetence. The Secretary of State for Energy must bear some responsibility for the fact that the chairman of the NCB still holds office. Mr. MacGregor is probably the most spendthrift, incompetent chairman of a nationalised industry that this country has ever experienced. It is to the eternal shame of this Government that they continue to prop him up. It denigrates this great industry.
We have listened to lectures from Conservative Members about finance, and we should not forget that the Chancellor of the Exchequer described the miners' strike as "a worthwhile investment." It has been made perfectly

clear tonight that the Government have no energy policy and, moreover, have no intention of creating one. They are operating a pragmatic, mixed energy strategy. If during the last 12 months their policies contained any element of strategy it was designed not to reach a negotiated settlement but to defeat the National Union of Mineworkers.

Mr. Peter Walker: indicated dissent.

Mr. Eadie: The Secretary of State for Energy can mumble as much as he likes, but I shall continue to say that he could have settled the strike honourably. I telephoned him from Sheffield and told him what had been said in the House of Commons—that the Government would accept the NACODS agreement without it being signed. The strike could have been settled because I had the full authority of the NUM behind me, but the right hon. Gentleman refused even to speak to me. He had no enthusiasm for ending the strike.

Mr. Walker: Rubbish.

Mr. Eadie: It gives me no pleasure to say that the Government will come to regret their strategy. Many of my hon. Friends and I have a great feeling for the industry. We have worked in it and we believe in it. It is necessary for the nation. I say that pointedly to the Secretary of State.
The Government were prepared to use any weapon to achieve their ends. They were willing to use the energy sector as a blunt instrument, involving nuclear power, imported coal and huge revenues from North sea oil. It has become obvious over the past 12 months that the Government have been prepared to use vast amounts of the nation's capital wealth to gain what they saw as a "victory" in the miners' strike.
We do not know the exact figures, but perhaps one third of the annual revenue from North sea oil has been spent on the strike. Even if it is £5 billion or £6 billion, it is likely to increase as the knock-on effects run through the economy. We do not know the price of that industrial dispute.
Energy supply and use remain uncertain in many respects and the Government do not have a free hand. For example, a massive nuclear power programme would take 10 years to get under way. Building the facilities to handle huge quantities of imported coal would be too expensive, and the strengthening of the dollar, which is still strong, has reversed the competitive position of coal imports anyway. Oil prices are not expected to fall substantially and the large price advantage enjoyed by coal will, therefore, be maintained.
I think that I speak for my hon. Friends when I say that the nation and the Government cannot do without NCB deep-mined coal. There is no alternative in the short term or the medium term.
I am not sure about the CEGB agreement on coal use. I have read conflicting figures. I am told that the CEGB may have agreed to take up to 95 per cent. of its coal from the NCB, but the price aspect is interesting. The price is lower than that at which even South African coal can be imported into power stations. In addition, I learn that the CEGB has been ordered to replenish its stocks to pre-strike levels, which means that it needs another 20 million tonnes. The market position has changed since March 1984, and the nation needs coal.
It is about time that we were given a satisfactory reply about the victimised miners. Ministers in the Department


of Energy have been dodging the issues. The problem will not go away. Ministers cannot sustain for much longer their response that it is a matter for the NCB. It is not.
As I said in the debate on the redundancy payments scheme, the NCB is a creature of statute. Parliament and the sponsoring Ministers therefore have a responsibility in relation to the board. The Coal Industry Nationalisation Act 1946 requires Mr. MacGregor and every area director of the NCB.
to enter into consultation with organisations appearing to them to represent substantial proportions of the persons in the employment of the Board".
As my hon. Friends have said, and as the hon. Member for Orkney and Shetland (Mr. Wallace) also pointed out, a procedure for conciliation and consultation is written into the Act but it is being deliberately and blatantly violated by the National Coal Board. Under the conciliation procedure, every miner who is dismissed has the right to have his case individually considered. As my hon. Friend the Member for Dunfermline, West (Mr. Douglas) said, there are three stages—the last of which is consideration by the umpire, whose decision is binding on union and management alike. To do as Ministers suggest, and as the National Coal Board itself has the audacity to suggest, and to refer cases to an industrial tribunal as a road out is a wanton deception when Parliament has already laid down the procedures to be followed.
When I raised one of the cases with the Secretary of State—I am grateful to him for being present now—and pointed out that the procedures for conciliation and consultation had not been carried out by the NCB, he replied on 15 April:
You raised a particular point about the NCB's conciliation procedures. I suggest that you get in touch with the Board direct if you find it helpful to have clarification about the operation of those procedures.
That is a complete abdication of responsibility.

Mr. Fallon: Nonsense.

Mr. Eadie: I will deal with the hon. Member for Darlington (Mr. Fallon) later.
As the sponsoring Minister for coal, the Secretary of State is accountable to Parliament to ensure that its statutes are observed. Failure to do that is dereliction of duty and the Secretary of State should be censured for that today.
The hon. Member for Orkney and Shetland described the position of a miner whose case had been found not proven in the court. I think that the position is even worse than the hon. Gentleman suggested. The miner in question was NUM secretary at Bilston Glen colliery, in my constituency, and he was charged with having committed a breach of the peace because he had overstepped a white line.

Mr. Wallace: That is right.

Mr. Eadie: Last week Lothian regional council, which is Tory controlled, wrote to the NCB in Scotland criticising the board for drawing the white line because it was illegal and the NCB had no business to put it there. When will Ministers at the Department of Energy exercise the responsibility given to them by Parliament? We are certainly entitled to censure them today for failing to carry out their parliamentary responsibilities. My constituent was victimised because the NCB broke the law by drawing that white line.

Mr. Fallon: The hon. Gentleman is obviously referring to a man who was victimising other people rather than being victimised himself.

Mr. Eadie: That is rubbish. The hon. Gentleman has not been long in the House. I hope that he was listening to me. I do not understand how he can reach such a conclusion. I shall deal later with his speech.
My hon. Friend the Member for East Lothian (Mr. Home Roberston) drew attention to an article in yesterday's edition of The Scotsman. He made important points, but they are not the real issue in that story. A strike centre was set up in Dalkeith in my constituency. The lads were on strike for 12 months. The article in The Scotsman tells of a centre in Edinburgh designed specially for the treatment of children suffering from leukaemia. The lads went to Edinburgh and did all the labouring work to make the centre ready for the children. That is why the article said that the Princess hoped that the miners would get back their jobs. Indeed, she met one of the victimised miners.
Many of the lads in the strike centre in Dalkeiif have been victimised, yet they showed feeling and compassion for the community. They have been found guilty of trivial offences, but we are told by the Prime Minister, MacGregor and Wheeler that they are criminals and vandals. We are entitled to resent that. Those lads voluntarily gave time to ensure that a centre was prepared for children suffering from leukaemia. It says a great deal for those who organised the function that when they asked Princess Alexandra to open it they had the thoughtfulness and decency to invite some of the lads to the opening ceremony. I am proud of the lads, not ashamed of them.
I wish to deal briefly with the hon. Member for Darlington, who made a peculiar speech. He began with a conciliatory and sympathetic tone, but then said that one panacea for solving the problems of good, cheap, indigenous coal was to develop opencast mining. I do not think that many of his Tory friends will thank him for the suggestion that we should go to Oxford, Sussex and Surrey and develop mass opencast mining. If the people of Oxford, Sussex and Surrey are worried that that may happen, I can allay that worry. The hon. Gentleman suggested that we should substantially increase opencast mining. The Minister can confirm that the maximum production of opencast is about 15 million tonnes.
The hon. Gentleman should have researched more carefully before suggesting that opencast mining would solve the fuel problems of this country. When Mr. MacGregor arrived in this country, he thought that we could get all the cheap coal we wanted by doing what they do in America. They call it strip mining; we call it opencast. He then discovered that even developing opencast mining to produce 15 million tonnes is very doubtful and that there is only 30 to 35 years of opencast. If the hon. Gentleman is suggesting that we double opencast production, its life would be about 17 years. The hon. Gentleman seems to think that there would be a bonanza as a result of substantially increasing opencast production. I do not know with whom he is associated, but I am sure that he has in mind private capital and private investment. That would enable the so-called entrepreneurs to make a killing from the mass development of opencast mining. I know that the hon. Gentleman was educated at St. Andrew's university and I live in the county of Fife. He will understand when I say that he was blathering. He will understand at least that much of the Scottish language.

Mr. Fallon: I did not say that I wanted opencast production to be doubled. I suggested that production should be increased by at least half as much again. I did not say anything about a bonanza and I have no financial interest in the opencast operation. I want to know whether the hon. Gentleman agrees with the quantity controls on opencast production, with the reluctance of county councils in the north-east to grant planning permission and with the reluctance of the board to grant licences to its licensed operations. Is he happy that men are to be laid off in the north-east—some of them will be my constituents—who are not employed by those for whom he acts and who are members of the Transport and General Workers Union and not of the NUM? Is he happy that the industry should be frozen and fossilised in the north-east rather than expanded slightly to the degree that I have accepted?

Mr. Eadie: I am not happy about the Government's attitude to providing employment opportunities. If the hon. Gentleman is suggesting that in the interests of employment we must ride roughshod over people's environment, whether for opencast production or deep mining purposes, my response is that we are entitled to consider the environment of others.

Mr. Fallon: rose——

Mr. Eadie: There should be inquiries. We should know precisely what we are doing. The opencast operation provides only a small part of our energy needs and our energy needs will not be met and our problems will not be solved or mitigated through increased development of the opencast operation. I shall not give way to the hon. Gentleman again as I have answered his question.
It is not unreasonable for the Opposition to ask about future investment in the industry. My hon. Friend the Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) addressed himself to this very issue. The Government must know what the future holds. The Secretary of State claims that he has an arm's length relationship with the chairman of the board. He is always trying to kid us that that is the relationship. I was a Minister in the Department and I am aware of the Department's relationship with the coal board. It is bound to have an idea of the new pit sinkings that are planned. If it has not, it should be asking the board for information. We are debating the provision of substantial sums and we are entitled to know what is planned. The people are entitled to know; Parliament is entitled to know. The Secretary of State does not like it when I say that it is to the eternal shame of the Government that not one new pit has been sunk since the Government came to office in 1979.
If we are talking about investment, we are entitled to know about new pit sinkings. We are entitled to know whether the new pits will be sunk. Some of my hon. Friends have asked about investment, and we are entitled to expect answers from the Minister.
On 10 March, Mr. MacGregor was reported in The Sunday Telegraph as saying that the number of pits would be reduced to between 80 and 120 by 1990, and that year is not a long way away. As my hon. Friend the Member for Cynon Valley (Mrs. Clwyd) said, we are talking about a massive contraction of the mining industry and not merely pit closures. Are we talking about a replacement strategy? We must know whether this is to be the strategy, and we must know when it will happen and the precise

location. What is the projected output envisaged not only for this year, but for the next five years? We want to know how many pits will be left and what the manpower will be.
By any standards, the Bill contains substantial borrowing powers, and this is one point on which my hon. Friends agreed with Conservative Members. The Minister should tell us the rate of interest on the money borrowed by the coal board. We know that the rate is decided by the Treasury, and I believe that we are entitled to that information. How much interest will the NCB pay on its borrowing as a result of the Bill?
Many questions asked in the debate remain unanswered. Some of them are probably best dealt with in Committee. I give notice to the Minister that when the Bill reaches Committee we shall want a great deal of information about the consequences of the Bill, including pit closures, pit sinkings and coal board enterprises. I hope that when the Minister replies he will be able to answer some of the questions that we have asked. If not, I trust that he will either write to me or give us the information in Committee.

The Parliamentary Under-Secretary of State for Energy (Mr. David Hunt): Tonight we have had a wide-ranging debate on matters relating to the coal industry and, as the hon. Member for Midlothian (Mr. Eadie) said, relating to this important Bill. A wide range of opinions have been expressed, and many points have been made with which I shall try to deal in the next few minutes. However, as to the specific questions on points of detail, I should be grateful to the hon. Gentleman if he would allow me to respond to them either in writing or in Committee, if they relate to mattes that will come up there.
It is right that there should be such widespread interest in coal because of the importance of the coal industry to the British economy. More than one third of the primary energy demand in the country is met by coal, and three quarters of our electricity is normally produced by coal-fired generation. Britain is richly endowed with energy resources, including gas, oil, nuclear power and coal. It is important that all those options should be active and developing. Coal production must include not only deep-mined but open cast, and the relevant points made by my hon. Friend the Member for Darlington (Mr. Fallon) were, to some extent, misunderstood by the hon. Member for Midlothian.
The debate was primarily about the resources to be made available to the coal industry during the coming two years. The hon. Member for East Lothian (Mr. Home Robertson) went rather far when he said that this was a little gesture from the Government. It is much more than that. As my hon. Friend the Member for Sherwood (Mr. Stewart) rightly said, it is enough to incite a strike by taxpayers. My hon. Friend the Member for Ludlow (Mr. Cockeram) reminded us that this is a depressingly familiar ritual involving massive sums of money, and he reduced it to the simple figure of £2 a week compulsory taxation. He stressed that that level of subsidy was intolerable. We seemed to float from one statement to the next, with the hon. Member for Hemsworth (Mr. Woodall) saying that the Government were just paying lip service to the industry. No wonder my hon. Friend the Member for Warwickshire, North (Mr. Maude) said that any stranger coming into the debate would be incredulous, and rightly so, because we are talking about substantial sums. As my


hon. Friend the Member for Erewash (Mr. Rost) said—[HON. MEMBERS: "Where is he?"]—he had seen it all before, and he made some points——

Mr. Hardy: rose——

Mr. Hunt: Just one second, if the hon. Gentleman will contain himself——

Mr. Douglas: On a point of order, Mr. Deputy Speaker. I hesitate to do so, and apologise to the Under-Secretary. Is it not a convention that one does not reply to speeches when the hon. Members concerned are not in the House?

Mr. Deputy Speaker (Sir Paul Dean): If that were to happen, many speeches would be made in the House to which no reply was given.

Mr. Hunt: If I might respectfully put the point, I think that my hon. Friend the Member for Erewash raised an important question when he pressed me as to whether the Government would now turn their attention towards privatisation of the coal industry. I wanted to make it absolutely clear that the Government have no plans for privatisation. What the coal industry now needs is a period of consolidation and growth as we recover from the strike. We have stressed that time and again.
The hon. Member for Doncaster, North (Mr. Welsh) gave some figures for subsidies from the European Community. It is right that we should put them in context because this country provides more support to its coal industry than any other Community country. The comparison must take into account long-term support in the form of investment finance as well as short-term support in the form of production subsidies. The amount of investment that this country has put into the coal industry has been at record levels under this Government.

Mr. Welsh: I accept that there has been a tremendous amount of investment. But does the Minister agree that the coal board cannot get investment finance from anywhere else? The coal industry is not allowed to go to the open market for investment finance. We are not allowed to go to Europe for investment finance. It can come only from the state. We pay the going rate—in fact, a little bit more—to pay back the finance, or a negotiated rate, which the Minister might tell us about. That fact must be brought to hon. Members' notice. The only place from which we can get investment finance is the Government of the day.

Mr. Hunt: But as the hon. Gentleman will know, it is a convention that nationalised industries borrow from the national loans fund. They do so because, for the country that is a cheaper way of borrowing money than borrowing it on the open market. That is a fact of life. I do not want to go into the detailed points that the hon. Gentleman raised. He mentioned several other important matters, on which I shall write to him.
I should like to refer to the crucial point raised about the alleged leaks from the Community mentioned by the hon. Members for Cynon Valley (Mrs. Clwyd) and for Carrick, Cumnock and Doon Valley (Mr. Foulkes). I remember the hon. Gentleman debating many years ago. He has probably forgotten it. Time has not moved on for him since then, but for me I hope it has. I saw the Commissioner, Mr. Nic Mosar, with my right hon. Friend the Secretary of State on Monday. He categorically denied that there was any such proposal.

Mr. Foulkes: Really?

Mr. Hunt: Let the hon. Gentleman accept what I have said. He categorically denied that there was any such proposal.

Mr. Foulkes: Of course I accept what the Minister said, but does he accept that I have heard, from a reliable source, that the energy Commissioner put forward to the Commission a paper on the phasing out of state aids to the coal industry. My hon. Friend the Member for Cy non Valley (Mrs. Clwyd) has had exactly the same information. It has been published in the press. In view of that, will the Minister go back to Mr. Mosar, find out exactly what the position is, and try to clarify it? It is very worrying if such a proposal is in train.

Mr. Hunt: My right hon. Friend and I had a good and constructive meeting with the Commissioner on Monday. He made it clear that there was no such proposal, but he is working on a paper that will come before the Commission. A further proposal must be made because the current regulation expires this year.
The industry must continue to receive support through the funds available so that it can break even. That is the sane solution and the only way to secure jobs in the industry.
My right hon. Friend the Secretary of State has set out clearly what is to happen about closures. Negotiations are in progress to agree the new procedure. It is a matter of common sense. I am sad that the right hon. Member for Salford, East (Mr. Orme) did not understand, but I do not think that he wanted to understand. The hon. Member for Wentworth (Mr. Hardy) and the hon. Member for Orkney and Shetland (Mr. Wallace) reminded the House that pits have always been closed because they are exhausted, because mining conditions have become too difficult or because they have become too uneconomic. Between 1964 and 1970 an average of 44 pits a year were closed—a total of 260. Under Labour Governments, 330 pits were closed. Pits containing significant quantities of coal underground were closed by the right hon. Member for Chesterfield (Mr. Benn).
Nobody denies that a decision to close a pit can have serious implications and should not be taken lightly. We are now dealing with a serious situation in the coal industry. Devastating damage has been caused by the strike—that sad, unnecessary and pointless strike. My right hon. Friend has explained how appalling the wrecked faces are.

Mr. Allen McKay: Closures were always agreed in the past. Following the strike, pits cannot be closed without first being examined under the review procedure.

Mr. Hunt: If a pit is closed because of damage caused by the strike, there will be an opportunity for the unions to consult the NCB. I am talking about what happens now when the majority of a work force wants to accept early redundancy or to transfer to another pit because it is obvious that their pit has no future. The NCB intends to introduce the modification to the review procedure. I hope that all parties will be reasonable so that current discussions are successful.
Dismissals have also been an important factor in the debate, but many hon. Members forgot an important factor. They forgot the background to what occurred. The country still remembers those disgraceful scenes of mob


intimidation and violence. I shall not comment on individual incidents because many people named might be innocent.
The hon. Member for Orkney and Shetland said that some workers were dismissed for trivial offences. I want more details so that I can draw the NCB's attention to the cases. I warn the House, however, that the NCB has already responded to the demand that every case be carefully considered and dealt with.

Mr. Eadie: We are becoming fed up with dodging and hedging. The point is that a procedure exists in the industry. It is no use the Minister saying that every case has been considered. That is not true and the Minister knows that it is not. Every miner is entitled to have his case heard individually at his colliery until the umpire makes his decision—which is final and binding on both management and men.

Mr. Hunt: That is not true. At the time that most of these dismissals took place, the NUM was not involved in the process of consultation and conciliation. This is a recognition of the true position. It is also a recognition of where the responsibility lies. It lies with an employer. The employer is the National Coal Board. It is right for cases to be raised with the NCB, and I shall raise the cases that have been mentioned in the debate with the NCB, but let us not get this out of proportion.
The hon. Member for Hemsworth asked what was wrong with verbal intimidation. I think it is deplorable that a small number of miners should continue to practise the tactics of intimidation such as we saw during the strike. Let no one doubt the NCB's determination to tackle this problem with firm disciplinary action, including dismissal if necessary.

Mr. Martin Redmond: Will the Minister now condemn the verbal abuse of men by management?

Mr. Hunt: No, because I have had no evidence of any such verbal abuse. If there is any evidence, I ask the hon. Gentleman to bring it to my attention.

Mr. Redmond: If that is the case, will the Minister sack the management in those cases?

Mr. Hunt: Let the hon. Gentleman produce the evidence for me first. I do not believe that there has been any, and let us not engage in political and parliamentary banter about that. Let us have the facts. Sadly, they have been lacking from Opposition Members.

Mr. Woodall: The Minister said that there has been no verbal intimidation. We both speak without any knowledge of the facts. These sackings occurred only this week, in fact, yesterday. This has involved the whole colliery in a strike. The neighbouring colliery has come out on strike in sympathy, and the strike is likely to get worse.
All that I said was that, if grown-up men cannot disagree and fall out verbally without men having to lose their jobs, there is something wrong with the state of the industry. I maintain, even without knowing the facts of the case, that verbal intimidation is not grounds for sacking a man.

Mr. Hunt: I apologise for not having observed that the hon. Gentleman is present. Had I done so, I would have directed my remarks to him.
I made clear that I was not commenting on individual cases. I was attacking the hon. Gentleman's attempt to justify verbal intimidation. I do not believe that in the conditions under ground any verbal intimidation can be justified in any circumstances.

Mr. Woodall: I have worked in the industry all my life, and I know for a fact that certain language is used which is called pit talk. Men talk bluntly to one another down the pit using very rough language. This has gone on from time immemorial. That is not verbal intimidation. It is just ordinary men in a man's world talking to one another. I do not think that it is grounds for men to be dismissed.

Mr. Hunt: We beg to differ.

Mr. Hardy: There is, I think, little difference between us in our assessment of what is tolerable and what is not. The Minister will be aware that at one point the chairman of the National Coal Board informed some senior officials of the NCB that he would like to have a certain portion of the anatomy of the general secretary of my association. That does not lend itself to decent relationships.

Mr. Hunt: As far as the National Coal Board enterprise is concerned, I would——

Mr. Foulkes: At the beginning of this section, the Minister said that we should not forget the scenes that we saw during the strike, and that we should put this into context. Does the Minister recall—I make no condemnation of what was happening, this is merely a comparison—that south of the border we saw riot shields and policemen on horseback? In Scotland, there was no riot equipment and nothing of that sort. Is it not paradoxical that proportionately more men have been sacked in Scotland than south of the border? Does that not give the Minister some cause for concern and some indication that this has not always been as fair as he thinks?

Mr. Hunt: No, it does not.

Mr. Barron: As the Minister will be aware, I live south of the border. He said that he does not want to comment on individual cases that have been raised. Will he accept, from what my hon. Friend the Member for Dunfermline, West (Mr. Douglas) and I have said, that conflict exists about the way in which individuals have been treated, bearing in mind the charges that were brought in the courts? Will he give an assurance that he will examine such cases to see, for example, whether there has been a discrepancy somewhere and whether miners in Scotland have been treated differently from miners in the rest of the British coalfield?
Is the hon. Gentleman also aware that in certain circumstances the conciliation procedure could not be implemented because during the dispute some people could not go to the NCB's offices or see the local officials because they were banned from doing that by the conditions of their bail? The Minister may consider that to be a red herring, but it is not. Throughout the strike in my constituency I came across cases of that type. My area was a hotbed of activity, particularly towards the end of the strike, and miners were confined to barracks, as it were, and could not leave home to take part in that conciliation procedure.
It is wrong for the NCB or for the Minister to say that those people should be denied the conciliation procedure.


They should be permitted to go through that process and at this stage there should be no question of industrial tribunals. Machinery for dealing with issues such as this has existed in the industry since 1947, and but for the NCB chairman importing tactics from America, the vast majority of cases about which hon. Members have spoken tonight would have been settled within the industry and there would have been no need for debate in the House or comment in the press.

Mr. Hunt: I have made it clear that I will bring every case to the attention of the NCB, and several Opposition Members have already been to see me about individual cases. The hon. Member for Rother Valley (Mr. Barron) has not provided any evidence but has hinted at cases where conciliation processes, though applied for, were denied. I should like further details of those cases. It is no good talking in generalities. I want the facts and the evidence.
The right hon. Member for Blaenau Gwent (Mr. Foot) derided the financial provision for NCB (Enterprise) Limited. The hon. Member for Easington (Mr. Dormand) did the same. I should like to investigate further the points made by the hon. Members for Hemsworth (Mr. Woodall) and for Ashfield (Mr. Haynes) about the lack of cooperation that they said they had had from the Enterprise company.
The company has been in operation since October 1984. It has already established extensive links with enterprise agencies throughout the British coalfield and it is now actively considering—in addition to the £0·5 million already approved in loans by the company, which will create up to 400 jobs—requests for funds in excess of £3 million with the potential to generate more than 1,000 new jobs.
From the Government's point of view, funds have been made available to the company, but they will be kept under review as the company's operations progress. We are determined to see this company succeed, and I have been pleased with some of the comments made by hon. Members on both sides of the House tonight in that they have demonstrated that everyone shares that determination.
I hope that the message from the Government tonight is clear. We believe in the future of the coal industry. There can be no question but that coal will continue to be a major source of fuel for our power stations for the foreseeable future. I am confident that there will be real growth in the industrial market for coal.
I have recently visited a number of sites where horticulturists and industrialists have converted their boilers to coal firing, many with the assistance of a coal firing grant. They are all pleased with the results and the savings that they are making. The market for coal is there if the opportunities can be grasped and if there is confidence in secure supplies of coal at the right price.
The hon. Member for Easington said that confidence was returning. It is, but it is fragile in the present circumstances. It needs everyone to put the strike effectively behind them. It is recovering only because of those who truly care about their industry. One of the most important resources of our coal industry is the calibre of the men who work in it.
I hope that Opposition Members will admit that the post-strike recovery is built on the solid rock of miners who worked through the dispute, and I pay tribute to their

courage and determination tonight—[Interruption]—as I shall pay tribute to them face to face in a few hours' time when I am three miles underground at Point of Ayr in north Wales.
They kept faith with the best democratic traditions of the industry and there could have been no possibility of any recovery had it not been for the hard work of NCB marketing, which worked tirelessly to ensure that no industrial customers went without coal during the strike.
But of course the strike set the industry back, and the deficit grant provision sought in this Bill for 1984 to 1985 gives some measure of the cost—a damaging wound in the side of Britain's economic recovery. The alternative was to have allowed an increasing haemorrhage of the coal industry's lifeblood pouring down on economic pits. The real cost, however, is even greater, as my right hon. Friend explained in his opening speech.
In the interests of his own Red revolution, Arthur Scargill—a name that we have not heard from the Opposition in this debate, which is why it has been a very unbalanced debate on their part—set miner against miner, community against community. He set out to sabotage the industry and he failed. We all know of his latest attempts to set up a Marxist dictatorship in the NUM. That is going to fail, as it must, because I believe that the NUM values its democratic traditions too highly for that.
There has been an attempt by the Opposition tonight to rewrite the history of the strike. We have heard the phrase, "If only there could have been a negotiated settlement". Well, there could have been if only hon. Members of the Opposition had supported the TUC initiative. But they were strangely silent when the moment came. They spoke from Scargill script then and they are still speaking from it tonight. My hon. Friend the Member for Sherwood (Mr. Stewart) attempted to put the record straight.
The most ludicrous suggestion came from the right hon. Member for Blaenau Gwent (Mr. Foot), and sadly the hon. Member for Barnsley, West and Penistone (Mr. McKay) seemed to try and support this. It was the notion that Mr. MacGregor wrecked any possibility of a settlement. Yet the whole country knows and remembers that Arthur Scargill said time after time that he was proud of never having budged an inch in his position. Yet we have had no mention of the leader of the NUM from the Opposition tonight.

Mr. Allen McKay: Let us put the record straight. We were talking about the meetings regarding the review. My information is that Arthur Scargill was very, very reasonable at the last two meetings. In fact, it was the NCB that was backing away. It was through those two meetings that the British Association of Colliery Management said that it had no trust in the chairman of the NCB and until that trust comes back there wll be no progress.

Mr. Hunt: We are talking, of course about the chairman who accepted the only ACAS proposal and I would have thought that the Opposition would revere the role of ACAS.
If only the hon. Member for Midlothian (Mr. Sadie) had at the start of the dispute backed a ballot, I do not believe that we would have had a strike. It was one of the NUM leaders at Kellingley who admitted that one of the reasons why they did not have a ballot was that they believed that they would not win it.
Surely the time has come for Opposition Members to stop reopening their own self-inflicted wounds and to do


what the vast majority of miners in this country are now doing—put the sad, damaging dispute behind them. Now is the time for the industry to look forward, not backward. There lies the real debate and the context in which this Bill is brought forward tonight.

Mr. Douglas: I cannot believe that the Under-Secretary is going to conclude his speech without giving us any detail of the expected production of the industry in 1985–86, the job position or the number of pits. Having asked for these vast sums of money, it would be a gross disrespect to the House if he concluded his speech without giving us any indication whatever.

Mr. Hunt: I have great respect for the hon. Gentleman but he must realise that—as in all previous coal industry debates—we are debating, at this early hour of the morning, the maximum financial requirements of the NCB in the form of deficit grant, pit closure grants and RMPS. As he will know, once that framework is decided, the NCB, which is meanwhile reviewing the reports that it is getting from areas, can within that overall financial framework set those targets and work out those detailed plans.

Mr. Barron: Will the Minister give way?

Mr. Hunt: No, I am still answering the hon. Member for Dunfermline, West (Mr. Douglas). The long-term future for the coal industry depends on its being able to face up to the problems and having the will to solve them. We cannot go on producing more coal than the market wants at a price that the market is not prepared to pay. I should have thought that was a general theme and undercurrent running throughout the debate.
In the short term there is a continuing need for the Government to continue support in the form of deficit grant. The Bill provides a sensible and realistic set of figures, up to £800 million for 1985–86 and 1986–87, but the objective remains, and that is break-even in 1987–88.
For the long term, good wages secure jobs and the proper level of investment cannot possibly be guaranteed in a permanent loss making industry. As my hon. Friend the Member for Darlington (Mr. Fallon) pointed out, for the sake of all those imvolved in the industry, the coal industry has to pay its way. The transition may in some ways prove to be painful. Facing up to reality often is, but that does not make it any less necessary. The Government are committed to a successful coal industry. That is the clear context in which we seek the support of the House for the Bill tonight.

Question put and agreed to.

Bill accordingly read a Second time and committed to a Standing Committee pursuant to Standing Order No. 42 (Committal of Bills).

Orders of the Day — COAL INDUSTRY BILL [MONEY]

Queen's Recommendation having been signified—

Resolved.

That, for the purposes of any Act resulting from the Coal Industry Bill, it is expedient to authorise—

Deficit grants

1.—(1) Grants to the National Coal Board out of money provided by Parliament, being grants for reducing or eliminating—

(a) any outstanding group deficit for the financial year of the Board ending in March 1985; and
(b) any group deficit for the financial years of the Board ending in March 1986 and 1987.

(2) In this paragraph "group deficit" means, in relation to a financial year of the Board, any deficit shown in any consolidated profit and loss account of the Board and any of their subsidiaries prepared by the Board in accordance with a direction given by the Secretary of State in respect of that year under section 8(1) of the Coal Industry Act 1971.

(3) The aggregate of the grants authorised by sub-paragraph (1) (a) above shall not exceed £1,200 million.

(4) The aggregate of the grants authorised by sub-paragraph (1) (b) above shall be subject to a limit of £600 million, capable of being increased by order to not more than £800 million; and that limit (as it applies for the time being) may be treated as increased by any amount by which the aggregate amount expended by way of grants authorised by sub-paragraph (1)(a) above falls short of the limit mentioned in sub-paragraph (3) above after reaching an amount equal to the amount of any such outstanding group deficit as is mentioned in sub-paragraph (1)(a) above.

Grants in connection with pit closures

2. Any increase in payments out of money provided by Parliament resulting from—

(a) extending the period in respect of which grants may be made under section 6 of the Coal Industry Act 1977 (grants in connection with pit closures) to cover the financial year of the Board ending in March 1987; and
(b) providing power by order to increase the limit under subsection (5) of that section on the aggregate amount of such grants to £450 million.

Redundant workers

3. Any increase in payments out of money provided by Parliament resulting from—

(a) extending the qualifying period for payments under a scheme under section 7 of the Coal Industry Act 1977 (payments to or in respect of redundant workers) until 29th March 1987;
(b) extending the period to which the limit under subsection (5) of that section on the aggregate amount of such payments applies to cover the financial year of the Board ending in March 1987; and
(c) providing power by order to increase that limit to £1,800 million.—[Mr. Archie Hamilton.]

PETITION

Buses

Mr. Michael Fallon: I beg to ask leave, Mr. Speaker, to present a petition to the House. It is prepared by the council of the borough of Darlington, and it is to the effect that this honourable House will decline to enact the Transport Bill or any other legislation to implement the proposals of the White Paper on buses.
I make no further comment on the petition, other than to remind the House, as is probably well known, that the fact that I present the petition does not mean that I endorse either the prayer or the premises on which it is based.

To lie upon the Table.

Coal Mining Dispute (Benefit Cases)

Motion made, and Question proposed, That this House do now adjourn.—[Mr.Archie Hamilton.]

Mr. Michael Welsh: I wish to discuss a matter which affects many of my constituents and those of other right hon. and hon. Members—the criteria for deciding benefit cases arising from the miners' dispute.
I wish to bring to the notice of the Minister the strange findings of the regional adjudication officer at Leeds in disqualifying many individuals from receiving unemployment benefit. It appears that, just because certain individuals were at one time employed in the pits in my area, and because the miners went on strike. the adjudication officer refused to allow unemployment benefit.
I shall give a few examples of people who have been refused benefit. I do not intend to deal with those mineworkers who were sacked, because I hope. Mr. Deputy Speaker, that my hon. Friend the Member for Don Valley (Mr. Redmond) will catch your eye later. A constituent of mine left the mining industry after the strike began and went to work in the building industry. Work on the project lasted for about three months. He was then made redundant. He claimed unemployment benefit, but his claim was rejected by the adjudication officer who said that he was still on strike. He was not a member of the National Union of Mineworkers and he was not on strike. The result was that he received no unemployment benefit. Furthermore, £16 was deducted from his wife's social security benefit because it was said that her husband was on strike.
Many mineworkers in my constituency were made redundant during the early stages of the strike and received redundancy payments. However, the regional adjudication officer ruled that they could not claim unemployment benefit because they had been involved in the strike. There must be many similar cases in other mining constituencies. In another case, well before the strike began, a lad who was on strike won a scholarship to Sheffield university to read philosophy, politics and economics. At the beginning of the academic year in October he left the pit and the union and went to Sheffield university. He could not find a holiday job at Christmas, so he thought he would be entitled to unemployment benefit because his national insurance stamps had been paid. The adjudication officer refused his claim because, it was said, he was involved in the mining dispute. That was unbelievable. He was no longer a mineworker; he was studying for a degree at a state university.
In a letter dated 19 April 1985, from the Parliamentary Under-Secretary of State for Employment, I was told:
I should first explain that Section 19.1 of the Social Security Act 1975 prevents the payment of unemployment benefit where a person loses employment because of a stoppage of work due to a trade dispute at his place of employment. Unless a person can show that he is neither participating in nor has a direct interest in the dispute".
All the cases that I have mentioned fall into line with that letter. They have nothing whatever to do with the dispute. These men are not members of the NUM. According to the Social Security Act 1975, therefore, the adjudication officer's decision was wrong.
Some of the men in my area say that the adjudication officer acted as a tool of the Government during the strike. Because of some of his findings, the lads could not come to any other conclusion, I sympathise with them. I have twice asked the Ombudsman to look into the matter, but it is not in his remit. He has reluctantly had to refuse. The debate is the only way open to me to bring the issue to the notice of the Minister of Social Security. Is there any way in which he can help the people who have wrongly been refused unemployment benefit by the adjudication officer at Leeds?

Mr. Martin Redmond: I am grateful to my hon. Friend the Member for Doncaster, North (Mr. Welsh) and the Minister for allowing me to say a few words. I fully support what my hon. Friend has said.
Decisions taken by the adjudicator are repugnant and beyond the comprehension of anyone with a rational mind. They lack common sense and are contrary to natural justice. I do not believe that when the House passed the Social Security Act 1975 it thought that the legislation could support such decisions. I know about the Act and the amendments made to it in 1976 and 1980, and I have read section 19 of the Act.
I believe that the adjudicator is exceeding his remit and his terms of reference. His judgment that ex-employees are still employed by the coal board or connected with the dispute is wrong. The strike is over and either the decisions are daft or they indicate a rather sinister overtone.
In spite of the alleged independence of the adjudicator, the Government will stand condemned by the country. If there is no sinister involvement of Ministers, I look forward to the Minister for Social Security telling us what steps he intends to take to end the gross misuse of power by the adjudicator.
Men who were sacked by the NCB during and after the strike did not stand to gain anythig from the strike after they had been sacked. The break in service is a clear sign that when they were sacked the fight for jobs was over for them. The bail conditions that the judicial system imposed stopped them continuing to support the fight for jobs, even if they were inclined to do that. They had no connection with the dispute.
A constituent of mine left the industry after the strike was over and has been denied benefit. The correct decision in his case should have been the loss of benefit for six weeks, but he was classed as still being on strike. The stupidity of the adjudicator's decisions is shown by the fact that a miner who worked, say, at the Cadeby pit throughout the strike, but was sacked for a contravention of the Mines and Quarries Acts after the strike was over would be classed today as being involved in the dispute and both he and his family would be denied benefit.
During the strike the adjudicator took decisions which were implemented immediately throughout his area, but now that the strike is over he is making decisions on a week to week, bit by bit basis. I do not knnow how stupid a person can get, but the adjudicator is not God and the miners should have the right to appeal against his decisions. The Department, however, has stalled and effectively stopped appeals from taking place, thus

denying people their rights under the law of the land. How any Minister can stand by and do nothing is beyond my comprehension.
The nudge and a wink brigade may have had something to do with this, but appeals lodged 12 months ago are still in the pipeline. That is disgusting and appalling. The system stinks and the stench from this malpractice must have reached the Minister by now. He may be an innocent party, but unless the adjudicator is called to account the Minister will stand to be condemned by association.

The Minister for Social Security (Mr. Tony Newton): I wish to say straightforwardly at the outset that I recognise the strength of the concern expressed by the hon. Members for Doncaster, North (Mr. Welsh) and for Don Valley (Mr. Redmond) in this debate and by a number of Members on both sides in recent months about some aspects of the application of the rules.
Clearly, I cannot respond in detail today to the exmplification cases——

Mr. Dennis Canavan: Why not?

Mr. Newton: The hon. Gentleman intervenes from a sedentary position on, somewhat unusually, the Opposition Front Bench, but I will answer his question. The reason is that I have not been given details of the particular names and cases, but I know that the hon. Members for Doncaster, North and for Don Valley understand that I will look into the details if they are given to me, especially the case of the student mentioned by the hon. Member for Doncaster, North. Having said that, I must emphasise that Ministers literally, genuinely and in good faith do not have power to override the decisions of adjudication officers, but I shall return to that later in my remarks.
This debate gives me the opportunity to set out again the framework of the legislation and the position in which both hon. Gentlemen and I as a Minister find ourselves in terms of the current legislation.
I will deal, first, with unemployment benefit. I remind the House—not in any partisan spirit but because it is important that this should be recognised—that the relevant legislation was introduced not by the present Administration, in the context of the miners' dispute or indeed of any other specific dispute, but by the Labour Government in the shape of section 19 of the Social Security Act 1975, which provides that a person who has lost employment as a result of a stoppage of work at his place of employment is disqualified from receiving unemployment benefit unless he can show that he is not participating in, or directly interested in, the trade dispute which caused the stoppage of work.
That means, or is held to mean, that the criteria for deciding benefit in those cases relate to four basic questions. First, is there an industrial dispute at the claimant's place of employment? Secondly, is there a stoppage of work at the claimant's place of employment? Thirdly, is the stoppage of work due to the industrial dispute? Fourthly, has the claiment lost employment as an employed earner as a result of the stoppage? However, if the claimant can show that he is not participating in, or directly interested in, the trade dispute that caused the stoppage, he escapes the disqualification.
The principle underlying those criteria is that public funds should not be used to finance strikes. There is


nothing new in that. It goes back a long way before the Social Security Act 1975 and has been accepted by all Governments. Those criteria have been part of the national insurance scheme since 1948. Even before that, similar considerations were a feature of unemployment insurance in a slightly different form from 1912 when unemployment insurance first started. Therefore, in one way or another we are talking about a modern version of principles that have been in social security legislation for very many years.
At this point I want to emphasise the central role in determining benefit claims that legislation gives to stoppage of work—that is, a significant interference with or hindrance of the normal operation of the employer's business activity. I shall return to that point later when I explain the criteria for lifting the disqualification for receiving benefit.
I now turn to supplementary benefit. Here, the legislation is very similar and is contained in section 8 of the Supplementary Benefits Act 1976—again introduced by a Government of a different complexion. Section 8(1) provides that where a person, by reason of a stoppage of work which is due to a trade dispute at his place of employment, is without employment for any period during the stoppage, his requirements for that period are disregarded for the purposes of supplementary benefit, except so far as those requirements include the requirements of another person which are treated as his. In other words, benefit is not payable in respect of the striker himself—only for his wife and family. As in the case of unemployment benefit, a person who proves that he is not participating in or directly interested in the trade dispute which caused the stoppage of work, escapes disqualification.
Section 19 of the Social Security Act 1975, to which both hon. Gentlemen fairly referred, also provides that a claimant who, during a stoppage of work at his place of employment, takes up bona fide employment in his normal occupation elsewhere, or becomes regularly employed in another occupation, removes himself from the disqualification. Otherwise, the disqualification remains in effect until the end of the stoppage of work at the claimant's place of employment.
At this point I must re-emphasise what I said at the outset about the position of adjudication officers.

Mr. Redmond: What about appeals?

Mr. Newton: I shall come to that point.
I am aware that some scepticism has been expressed. Without reference to any specific issue, I think that I can fairly say that Ministers find themselves occasionally frustrated. I might carry you, in a former incarnation, Mr. Deputy Speaker, with me on that. We are sometimes frustrated by the views that adjudication officers reach, acting quite properly within their responsibilities. In their private moments, Ministers think that it would be quite nice if they had the power to overrule adjudication officers. The fact is that they do not.
I hope that hon. Members accept that in this matter, as in others, there has been no question of Ministers leaning on adjudication officers and that they do not have the power to override them. Indeed, it would be quite improper if they had the opportunity to do so. It is always open to Parliament to ask Ministers to change the

regulations, but that is a quite separate matter from seeking to override the decisions of adjudication officers within the existing legislation.

Mr. Kevin Barron: At the end of the miners' strike, people who had been dismissed were being denied supplementary benefit as they were deemed to be still on strike whereas those who had returned to work and those who did not have the prospect of any income were in a position to receive full supplementary benefit Why did that happen?

Mr. Newton: I could not comment sensibly on that without the details of individual cases. The decisions will have been taken by adjudication officers in the way that I have described, which is by interpreting the regulations. I want to emphasise that strongly because I am aware of the scepticism in some quarters.
In making decisions on supplementary benefit, the adjudication officer has to take account of any decision concerning the trade dispute which has been made for unemployment benefit purposes, otherwise there might be inconsistency. If a decision about the unemployment benefit position has not yet been taken, or an appeal is pending, any supplementary benefit claim has to be dealt with meanwhile on the assumption that the decision will be adverse. As I have emphasised, Ministers have no powers to intervene in these decisions, and there is no question of our seeking to use the social security system to penalise miners, ex-miners or any other strikers. The whole point of having an independent adjudicating system is that it should be even-handed between all categories of claimant to benefit.
The hon. Member for Don Valley spoke about appeals. I should be disturbed if I thought that appeals were being delayed deliberately or deliberately not processed for any reason. Undoubtedly there can be delays, and there are delays in the appeal machinery quite apart from the miners' dispute. That is something that we have been seeking to tackle by reforms in the adjudicating system, which were implemented under the Health and Social Services and Social Security Adjudications Act. The reforms included the creation of a more independent status for the adjudication machinery and a president of the tribunals, who is now Judge Byrt, in place of the previous arrangements, which gave the impression that they were controlled more directly by the Secretary of State for Social Services. I shall draw to Judge Byrt's attention the comments of the hon. Member for Don Valley. It will be for the president to examine them because we have created greater independence for the adjudication machinery. I am sure that Judge Byrt, like myself, will be disturbed by the comments that have been made. If the hon. Gentleman cares to give me the details, I shall pass them on. Alternatively, he may wish himself to draw the suggestions directly to the attention of Judge Byrt as president of the social security appeal tribunal machinery.
I recognise that the industrial disputes legislation has given rise to a number of difficulties in interpretation, and I am aware of the concern that has been expressed about cases where benefit is still being refused even though there has been a general return to work in the coal mining industry following the decision of the National Union of Mineworkers on 5 March 1985. This is because, as I have explained earlier, the effect of section 19 of the Social


Security Act 1975 is to link the lifting of the trade dispute disqualification to the ending of the stoppage of work at the individual claimant's place of employment.
The traditional authority for determining when a stoppage of work ends is the social security commissioners' decision R(U)25 of 1957, which states:
a stoppage of work may come to an end without any settlement of the dispute, by the workers returning to work in a body, or by driblets, or by their places being taken by other men. In such cases the stoppage of work comes to an end when the employers have got all the workers they require, that is, when work is no longer being stopped or hindered by the refusal of workers to work on the employers' terms or the refusal of employers to employ the workers on the workers' terms. It may be that the employers cannot at one re-employ all the workers who are willing to work because the work has to be reorganised, or because repairs necessitated by the stoppage of work have not been completed. But when work is again proceeding normally and is not being held up, either by the men holding back or by circumstances directly resulting from the stoppage of work, the stoppage of work is at an end.
As I have explained, this test of a resumption of normal working must be applied to each individual claimant's place of employment. That picks up a point raised by the hon. Member for Rother Valley. I am sure that hon. Members will accept that applying it to the numerous and widespread places of employment in the coal industry, where the circumstances vary from colliery to colliery, has presented the adjudication authorities with formidable problems, including obtaining the relevant facts from the employer.
The recent dispute, which was of unprecedented length, has required the adjudicating authorities to apply the statute law in circumstances not met before, and they have had to follow case law which was decided in different circumstances, although close enough to make it binding now. Hon. Members may recall the Adjournment debate on 14 January initiated by the hon. Member for Pontefract and Castleford (Mr. Lofthouse), when the House discussed the payment of benefit to redundant mineworkers, which has also been mentioned this evening. On that occasion, my hon. Friend the Under-Secretary of State explained that several cases were being referred by the

chief adjudication officer to the social security commissioners. The hearing of one case by a tribunal of commissioners took place on 16 and 17 April, and it is expected that its decision, which is due shortly, will provide further guidance on the position of persons to whom the trade dispute qualification applied, but who were made redundant before the stoppage ended, and also as to the principles to be applied in determining when a stoppage of work ends.
We shall, of course, examine closely the outcome of the social security commissioners' decisions on all the cases going before them, and give careful consideration to whether they reveal any need—this answers the intervention of the hon. Member for Falkirk, West (Mr. Canavan)—for legislative change. But, as I come to the end of my speech, I remind the House once again that we are talking about legislation which is based on principles and criteria that go back to 1912 and which have, for half a century and more, been accepted by previous Administrations of all political colours.
Therefore, I hope that hon. Members will recognise the difficulty in which I am placed in commenting on individual cases and the difficulty that the proper independence of the adjudicating authorities creates for any Minister in this position. I have offered to examine matters that hon. Members bring to my attention, against the background that I described. I shall draw to the attention of the president of tribunals the remarks which the hon. Member for Don Valley made about appeals. I hope that they can be assured, with all the good faith at my command, that I recognise their anxiety and am grateful to them for the opportunity to place those points on record again. The debate has given them the opportunity to do the good job which I know they always do on behalf of their constituents in bringing such matters before the House. I can well appreciate the pressures on them and the concern that is felt in their constituencies——

The Question having been proposed after Ten o'clock and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at eight minutes past Two o'clock.